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Author: 


City  Club  of  Los  Angeles 


Title: 


Report  on  government 
ownership  of  public  utility 

Place: 

Los  Angeles 

Date: 

1917 


COLUMBIA  UNIVERSITY  LIBRARIES 
PRESERVATION  DIVISION 

BIBLIOGRAPHIC  MICROFORM  TARGET 


MASTER  NEOATIVE  • 


ORIGINAL  MATERIAL  AS  FILMED  ■  EXISTING  BIBLIOGRAPHIC  RECORD 


049 


'I'     »  <■ 


City  oliib  of  Los  Angeles,  cal.    Committee  on 

munioipal  (^nership. 

Roport  on  go^mvient  oimership  of  publio 
utility  service  undertakings  ...  presented  to  ' 
the  Club  .  . .    June  thirty,  nineteen  seventeen  . . . 
|Los  Angeles 3  City  club,  of  Los  Angeles,  1917. 

38  p.    23  on. 


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or"  GCVE*mi:K!l?  Q'^IIiHSHIir       PUBLIC  UUIUm 


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REPORT  ON 


Government  Ownership 


OF 


Public  Utility  Service 
Undertakings 


Fmpmed  by  the 
COMMITTEE  ON  MUNICIPAL  OWNERSHIP 

id  the 

r     CITY  CLUB  OF  LOS  ANGELES 


PRISBNTBD  TO  THE  CLUB,  AND  ORD£R£D  PRINTBD 
June  Thirty,  Nineteen  Seventeen 


PRICE  !•  CENTS 


PUBLISHED  BY  THB 
CITY  CLUB  OF  LOS  ANGELES,  CALIFORNLV 
September  IS,  1917 


INTRODUCTION 


During  the  latter  part  of  1915  a  Special  Committee  on 
Mtmlcipal  Ownmhip  was  appointed  by  Francis  B.  Kellogg, 
Preaidfliit  of  tlie  Ctty  dab  of  Los  Angeles,  witb  Chailes  K. 
Mi^er,  Consulting  Engineer,  Chairman. 

Tlie  first  result  of  tbe  Committee's  work  was  embodied 
In  a  report  (based  on  1915  data  tben  available)  presented 
dniing  tbe  fall  of  1916,  and  giyoi  to  the  press.  This  part  of 
the  report  is  still  left  mainly  on  the  1915  basis. 

A  supplemental  report  was  snbaeQaently  prepared,  a  brief 
synopsis  of  which  was  presented  to  the  Club  at  its  regular 
meeting  on  Saturday,  Jime  30th,  1917,  by  the  Committee 
Chairman. 

Both  reports  have  been  almost  wholly  the  work  of  Mr. 
Mi^er. 

These  r^K>rt8  contain  a  vast  amount  of  detail  information 
whieh  should  be  made  avaflahle  to  those  interested  in  public 
senrlee  finances  and  municipal  ownership  questions.  It  is 
believed  that  much  of  the  data  In  tiie  supplemental  report 
and  the  method  ot  preeentatlon  are  original  and  unique. 

In  view  of  the  great  Importaiice  of  Mvnlcipal  Ownership 
extension  and  the  taitereat  of  the  gmieral  public  therein,  the 
City  Club  has  seen  fit  to  hare  both  detailed  reports  and  the 
synopsia  published.  It  la  earnestly  hoped  that  in  so  doing 
the  Club  and  its  Cmnmfttee  will  have  ftumlshed  a  distinct 
oontrlbution  to  aid  in  the  full  realization  of  government  own- 
en^p  of  all  Publie  Utfilty  Servioe  Undertakings. 

Respectfully, 

A.  G.  BARTLETT, 
President,  City  Club  of  Los  Angeles. 


toB  Angeles,  GaUf.,  July  28th,  1917. 

>tA«a>lAab«» 


REPORT  ON  GOVERNMENT  OWNERSHIP  OF  PUBLIC 
UTILITY  SERVICE  UNDERTAKINGS  BY  THE 
ANGELES  CTTY  CLUB  COMMITTEE  ON 
MUNICIPAL  OWNERSHIP 

rNTRODUCTORY  OUTLINE  OP  "FIRST"  AND  "SUP^ 

PLEMENTAL"  REPORTS 

There  is  probably  more  expressed  sentiment  in  favor  of  municipal  ownership 
of  public  service  utilities,  with  at  the  same  time  less  real  accomplishment  in 
establishing,  than  for  any  other  question  of  public  policy  in  our  country. 

As  many  complaints  are  heard  about  the  tiigh  cost  of  living,  taxes,  ineffi- 
ciency and  graft  in  public  service,  and  others  of  a  like  nature,  it  should  be  of 
interest  to  every  mie  to  know;  of  the  accomplishments  of  cities  in  other  coun- 
tries, the  flnapcial  status  and  attainments  of  Los  Angeles  in  municipal  ownership, 
also  the  actual  and  relative  value  of  property  devoted  to  public  utility  service, 
and  the  annual  cost  of  service  rendered  by  government  agencies  and  privately 
owned  utility  concerns. 

To  better  inform  ourselves  the  committee  has  undertaken  to  secure  and  pre- 
sent data  on  the  following  questions: 

First— The  extent  of  governmental  ownership  of  publio  service  utilities  In 
QmuX  Britain,  Germany  and  the  United  States. 

Second— Bonded  debt  for  revenue  and  non-revenue  pniiiiellig  purposes  in 
some  typical  German  and  American  cities,  and  the  City  of  Los  Angeles. 

Third— AccomplishmenU  of  Los  Angeles  in  undertaking  municipal  ownership. 
Fourth— Bact^sion  of  government  ownership. 

Fifth— The  value  of  property  devoted  to  public  utility  service  in  the  dty 
under:  (a)  Public  ownership,  (b)  Private  ownership,  (c)  Public  property 
created  under  private  contracts,  (d)  The  total  amount  of  public  service  prop- 
erty subject  to  private  control  or  Influence. 

Sixth— The  annual  cost  of  public  service  for  the  city  under:  (a)  Public 
ownership  and  operation,  (b)  Private  ownership  and  operation,  also,  (c)  Cost 
of  public  work  done  under  private  contract. 

Sevenths-Incentives  for  poUtical  activity  by  the  private  interests  engaged 
in  publie  utility  service  and  public  works  contracts. 

Eighth — Conclusions  and  recommendations  for  extension  of  government  own- 
ership of  public  sOTvice  utility  undertakings. 

[3] 


I 

SYNOPSIS  OF  REPOETS 

GOMKAHISON  OP  AMERICAN,  GBBAT  BRITAIN  AND  GSRMAN  CITIKS 
*  n£  ^JLii  ^"f       ^^r^can  cities,  the  50  largest  elites  in  Great  Britain  and 

wiSle.  SriSLw^T^r^'  ^""^""^  p^ersmp  ^  Water.  Gas  and  Mectrie 
■nppues  in  numoer  and  per  cents  are  as  follows: 


OWNSRSHIP  OF  THREB  LEADING  SERVICE  UTILITIES 

No.  of  — Wate^-       —Gas—      —Electric—  —Total— 


aties. 

No. 

F.C. 

No. 

P.C. 

No. 

P.C. 

No. 

uu — 
P.C. 

39 

78. 

21 

42. 

44 

88. 

104 

€9.8 

Ctormany   

...50 

48 

96. 

60 

100. 

42 

84. 

140 

93.8 

49 

87.5 

1 

1.8 

7 

12.5 

57 

33.9 

Tlotais*  and  %  . 

m 

87.2 

72 

46.1 

93 

59.6 

301 

64.3 

*MaI  nnmlier  of  utilities  for  all  cities  468. 


«#  #2^^  ^.^  °  ^^rylce  by  American  cities  is  well  established,  as  49 

offt^56  ciUes,  or  87.5%,  now  own  their  supplies.  This  is  higher  than  the 
OOmUM  aTorage  for  the  100  cities  in  Great  Britain  and  Germany 

^  Gorman  ciUes  own  their  gas  supply  whUe  only  one  of  the  56 
mmmmm  otttai  mnm  its  sopply. 

Gorman  cities  84%,  while  the  68  Amorioaa  dtiea  stand  at  12.6%. 

\?}^  average  ownership  of  these  three  ntlUties  sioir  that  the  Great 
Britain  cities  own  more  than  double  the  per  cent  of  American  cittes,  while 
mo  German  city  ownership  per  cent  is  nearly  three  times  as  much  as  ours. 

established  policy  of  ownership  of  water  service. 
21??  kITIS^^  supplies  is  hardly  considered  as  yet,  and  little  more 

tian  m  HeglBiiiBS  liao  boon  mado  in  tfoelrfo  serffoo  ownership  in  American  cities. 

IX>S  ANGISUBS'  BSXFWimSCa  WITH  MUNICIPAL  OWNBRSHIP 

frnJ^*JT^*^^!LJ^  ■'^^F^y  _^;^-^^?8  has  reduced  the  water  rates 
fttjm  20  to  7  oonts  par  188  on.  a  aad  tho  nHitaiim  monthly  bill  from  $1.50  to 
WW  cants. 

Unreasonably  higli  rates  are  charged  for  natural  gas  supplied  in  the  city 
and  a  controversy  has  heen  carried  on  concerning  tho  matter  for  the  last  four 
jfion. 

The  development  of  the  electric  power  along  the  aqueduct  by  the  city  has 
teen  hm  op  aacl  Mayed  fh»  time  to  time  through  the  influence  and  opposi- 
tion of  the  privately  owned  utiUty  interests.  The  total  electrical  development 
along  the  aqueduct  will  amount  to  126,820  K.  W.  This  is  equivalent  to  44.17% 
of  the  combined  production  of  the  private)  concerns  now  serving  Los  Angeles 
and  vicinity  (287.100  K.  W.).  It  is  equivalent  to  30.6%  of  the  total  full  produc- 
tfcm^tito  aonodoot  and  tlM  privale  eoneema  combined  (315,225  K.  w.).  Since 

SK^^^SS  pwpunad  ^  city  has  pot  in  operaUon  one  plant  with 

18488  K.W.  capacity. 

While  the  Los  Angeles  bonded  debt  per  capita  is  higher  than  in  most  cities 
of  the  country,  the  issues  are  principally  for  revenue)  producing  undertakings, 
vliieli  ]ia3re  not  been  brought  fully  up  to  a  revenue  producing  basis.  The  service 
QtiUtiea  tiMt  alHmld  bo  taksn  owmt  at  once  by  the  ctty.  Gas  and  Electricity,  are 
going  concerns  and  should  be  fully  self  supporting,  with  a  probable  good  proUt 
return  at  the  present  rates.  For  a  community  to  issue  bonds  for  such  undertak- 
^8S,  in  whatever  amount  necessary,  on  a  conservative  business  basis,  is  only 
Sood  coflUBon  sonse  when  a  distinct  gain  or  saving  to  the  community  can  be 
iOiiiiiriiid  Inr  mk  Jtf*am  " 


PUBLIC  SERVICE— PROPERTY  VALUES 

Detailed  information  in  tabular  form  gives:  Non-Revenue  Producing  Mu- 
nicipal and  County  Property.  Revenue  Producing  Municipal  Property.  Privately 
Owned  Public  Service  Utility  Property,  Local  and  Interstate. 

The  summary  shows  the  total  per  capita  value  of  service  property  is  1886.86, 
of  which  over  half  (1491.78)  is  under  mivate  ownership.  Public  property  created 
under  private  contract  amounts  to  a  total  of  $44,000,000  or  $88.00  per  capita. 
Public  property  subject  to  private  influence  through  franchise  grants  $138,266,605 
or  $276.53  per  capita.  Total  public  service  property  subject  to  private  interest 
influ«M%  1428,165,000  or  $856.31  per  ci^pita  equal  81.64%  of  the  totaL  Stato 
and  United  States  property  is  not  included. 

COST  OF  SERVICE.  DIRECT  TAX  UBVY,  ETC. 

Detailed  information  on  the  annual  cost  of  public  service  covers  cost  of: 
Non-Revenue  Producing  City  and  County  Service.  Revenue  Producing  Service 
by  the  City.  Public  Utility  Service  Rendered  by  Private  Ckmcems,  Local  and 
Interstate. 

Information  is  given  concerning  the  annual  cost  of  work  carried  out  under 
private  ccMitract,  which  in  1915  amounted  to  $6,707,629  or  $13.41  per  capita. 

The  summary  gives  the  following  annual  costs  of  public  service  rendered  by  : 

Publicly  Owned — 

City  and  School  District.  .$16,711,127.  Total,  Per  Capita  $33.42 

County    6,282,000.  Total,  Per  Capita   12.56  (City's  Portion) 

State    3,160,000.  Total,  Per  Capita    6.32  (City's  Portion) 

United  States    5,470,000.  Total,  Per  Ci^lta  10.94  (City's  Portion) 


First  Sub-Total   $31,623,127.  Total,  Per  Capita  $^.24 

Privately  Owned  Utility— 

Local   $25,078,782.  Total,  Per  Capita  $50.16 

Interstate    19,030,540.  Total,  Per  Capita  38.06    (City's  Portion) 


Second  Sub-Total.... $44,109322.  Total,  Per  CJapita  $88.22 


Grand  Total   $75,732,449.  Per  Capita  $161.46 

Cost  of  water  transportation,  cartage,  storage,  etc,  is  not  included. 
The  cost  of  public  service  is  paid  by  direct  tax,  fees,  licenses,  rentals,  in* 
temal  revenue,  duties,  rates  and  fares. 

Direct  tax  levy  for  1916  collected  by: 

City  $  6,763,716.  Total,  Per  Capita  $13.61 

County    4,410,000.  Total,  Per  Capita    8.82   (City's  Portion) 


Total  Sum  $11,163,715.  Per  Capita  $22.33    (General  Property  Tax) 


15] 


INCENTIVES  FOR  POLITICAL  ACTIVITY  BY  PUB- 
UC  UTILITY  SERVICE  AND  CONTRACTING  CON- 
CERNS  AND  NEED  FOR  EXTENSION  OF  PUB- 
LIC OWNERSHIP  AND  CONDUCT  OF 
PUBLIC  SERVICE  UNDERTAKINGS 

bmntives  for  Polittal  Aelivity 

Municipal  goTenmMOt  in  tlie  United  Stotes  lias  been  either  disappointing  or 
n  nunre  largely  because  of:  First— Poor  form  of  government  Second— City 
elections  based  on  national  party  politics.  Third— The  influence  of  the  spoils 
*^5r®?:  ^o*"^— Growth  of  public  service  utility  undertakings  in  private  hands 
yd  ftMM^  ginnting.  TOtli-Letting  public  works  contracts  to  private  in- 
twML  Laek  of  interest  by  tlw  eleetora  in  pnUic  affairs.   In  short, 

onr  cities  have  been  governed  in  the  interest  of  priyate  gain  rather  than  for 
the  unselfish  good  of  all. 

^^Back  of  municipal  government,  graft  and  scandal  has  been  almost  invariably 
tnaciiiae  trading  and  public  wotka  contracts.  Examples:  Tammany  Hall  con- 
HMon  in  mm  Turk  Olty,  and  ttm  8aa  Ftedseo  fftmdiise  grafters. 

MONET  MEASURE  OF  CONTBOI*  INFLUBNGB 

Public  service  property  values  and  cost  of  service,  under  private  oontrol, 
should  serve  to  show  the  degree  of  "interest"  of  the  "Invisible  Government" 
^  "^y'^^"^"  ^  public  affairs.  Over  half  (52.6%)  of  the  property  devoted  to 
pdilie  senriee  is  privately  owned,  wliile  over  a  third  more  (38.94%)  is  subject  to 
private  interest  iniinenee,  making  a  total  of  over  nine-tenths  (91.64%)  under 
selfish  interest  pressure.  Out  of  the  $151.46  per  capita  annual  serlroe  cost,  188.82 
or  nearly  three-fifths  (58.25%)  is  furnished  by  privately  owned  conoms.  Private 
enterprise  is  undertaken  primarily  for  profit. 

Private  interests  ceaesfned  in  mnniidpal  aifitirs  can  be  served  liy  a  "friendly" 
administration,  hence  their  Interests  and  aetirity  in  pontics.  Prises  and  re* 
turns  to  be  secnred  are  so  great  that  few  of  onr  cities  haw  escaped  this  Miiiil. 
ing  iniinenee. 


Qaui  from  Ckivemmeiit  OwMnliip  ia  DoUan  aoi  Omti 

Biafegarding  corrapCioii,  graft  and  political  scandal,  what  should  complete 
government  ownersh^  of  pvhllc  ser?lco  vtmties  and  enterprises  mean  to  us  in 

money  saving? 

Public  service  property  privately  owned  amounts  to  almost  |500  ($491.78) 
per  capita.  Rate  fixing  "fair  return"  is  8%.  Municipal  bond  interest  is  generally 
4%%.  Aannal  saving  between  fair  return  and  municipal  bond  interest  on  under- 
taklttgs  eoBdocted  withont  proSt  amoonts  to  8H%.  This  amount  of  saving  on 
the  per  capita  private  ownership  propeftgr  ▼alue  of  1491.78,  amounts  to  I17J1 
for  capita  or  $8,605,000  for  the  city. 

The  per  capita  amount  of  contract  work  in  1915  was  thirteen  and  one-half 
dfrifars  (113.41).  Contractors'  profits  are  generally  figured  at  20%.  Saving  if 
done  hy  city  without  pvoUt,  11.88  per  capita,  making  with  the  above  about  twenty 
dirtlars  (119.89)  or  nearly  ten  million  dollars  ($9,945,000)  for  the  city. 

With  complete  government  ownership  of  all  service  utilities  a  vast  amount  of 
dttpiication  and  waste  could  ba  avoided.  With  parcels  post  why  have  a  half 
doeen  private  express  companies?  Why  should  not  the  telegraph  and  telephone 
sendee  he  consolidated  and  made  a  part  of  the  postal  system?  It  is  hardly 
necessary  to  enumerate  the  dqpUcatlon  of  utility  service  concerns  in  Los  Angles. 
The  annual  cost  of  utility  serfice  In  the  city  rendered  by  privately  owned  con- 

L61 


cems  in  1915  was  $44,109,822  or  I88J2  per  capita.  It  is  a  conservative  pre- 
sumption that  the  elimination  of  duplication  alone  would  save  10%  on  thi& 
amount  or  $4,410,932;  per  capita,  $8.82.  This  with  ''fair  return"  sa,ving  gives 
a  total  of  $13,015,932  or  $26.03  per  capita.  Throw  in  for  good  measure  the  saving 
on  contracts.  The  direct  tax  levy,  both  city  and  county,  amounts  to  $11,163,715,  or 
a  per  capita  of  $22.33.  Often  complaints  are  made  about  the  amount  of  the 
direct  tax  levy.  The  two  items  of  saving  on  cost  of  service  rendered  by  private 
utility  concerns,  alone  amount  to  over  16.5%  more  than  the  entire  direct  tax 
levy,  saving  $26.03;  tax  levy  $22.33  per  capita. 

The  six  largest  per  capita  items  of  expense  for  service  are:  Interstate 
transportation,  $35.00;  local  street  railway  transportation,  $16.20;  locei  tele- 
phone. $18.04;  electric,  $12.52;  education,  $9.65;  gasi  $8.21.  Five  of  the  above 
are  privately  owned  utilities  end  amounl^  to  $84.87  out  of  a  total  of  $84.62  or  90% 
of  this  service. 

WHAT  THE  POTENTIAL  SAVING  WOULD  BUY 

If  the  people  of  Los  Angeles  were  able  to  save  the  amount  of  the  two  Items 
above,  $13,015,932  per  annum,  some  of  the  following  results  might  be  accomplished: 

One  year's  saving  would  nearly  pay  for  the  estimated  value  of  the  Los  An- 
geles Gas  and  Electric  Corporation  property,  $14,000,000.  The  same  estimate 
applies  to  the  two  telephone  companies.  It  would  more  than  two-thirds  pay 
for  the  estimated  value  of  the  Southern  California  Edison  property. 

Two  years'  savinge  ($26,031,864)  would  more  than  cover  the  estimated  value 
or  bonded  debt  irf  the  Los  Angeles  Railway  C!orporation  ($23,500,000).  It  falla 
only  $2,967,186  short  of  the  estimated  value  of  the  property  of  the  Pacific  lii^t 
and  Power  Corporation. 

Eleven  yeare*  savings  ($143,175,252)  would  more  than  pay  for  the  entire 
estimated  value  of  all  local  utility  service  property  now  under  private  owner- 
ship $140,427,000). 

We  believe  these  estimates  of  saving  are  conservative.  In  view  of  the 
above  showing  we  also  believe  that  all  utility  service  that  now  depends  on  fran- 
chise grants  or  is  in  its  nature  a  monopoly  should  be  carried  on  aa  govenimwit 
undwtakings.  As  practically  all  service  now  carried  on  as  government  under- 
takings were  at  one  time  private  enterprises,  why  should  we  he  ilow  or  timid 
about  complete  owneiahip  by  the  government? 


KEFOST  ON  THE  EXTENSION  OF  PUBLIC  OWNES- 
8HIP  OF  PUBUC  8SEVICE  UTIUTIES 

GfiOWTH  OF  PUBLIC  OWNEBSHIP 

III  imenl  all  fimetknis  of  soyemment  such  as  tax  collecting,  the  conduct 
of  sdiools,  ]Kdi«iiig  mnd  lire  proteeUon,  oonstnicttoii  and  maintenance  of  high- 
ways, postal  service,  sewerage  disiKMuO,  sanitation,  public  health,  etc,  were  car- 
ried on  at  first  as  private  enterprises.  It  logically  follows  that  government 
or  municipal  ownership  will  eventually  include  all  such  public  service  utilities 
as  water,  gas,  electricity,  telegraph,  telephone,  transportation,  marketing,  many 
featares  of  recreation,  anmaement  and  other  like  entennriseB. 

Am  most  of  the  functions  and  utility  services  now  univenally  performed  Ijy 
the  governing  agencies  are  not  of  a  profitable  nature,  little  opposition  was  en- 
coimtered  in  taking  them  over.  On  the  other  hand  most  of  those  still  conducted 
hy  priTate  enterpriee  are  of  a  profitable  nature,  and  as  a  result  the  effort  to 
extend  public  ownership  to  include  them,  meets  the  most  strenuous  <HI>position 
and  innumerable  obstacles  ai*  thmwal  in  the  wajr  by  those  owning  m  hsfing 
interests  in  them. 


PUBLIC  OWNERSHIP  IN  GREAT  BRITAIN,  GERMANY 

AND  THE  UNITED  STATES 

European  countries  have  gone  much  farther  in  public  ownership  of  service 
utilities  than  has  the  United  States.  Great  Britain  and  Germany  have  made 
greater  advancement  than  any  other  countries.  There,  railroad  transportation 
and  the  t^egraph  and  telephone  are  carried  on  in  part  at  least  as  government 
enteriirises.  In  the  larger  eities  ttie  majoit^,  and  in  some  cases  all  of  the 
important  utility  enterprises  are  carried  on  under  municipal  ownership.  Fred- 
rick C.  Howe,  in  his  "European  Cities  at  Work,"  gives  for  the  fifty  principal 
cities  of  Great  Britain  in  1909  and  a  like  number  for  Germany  in  1908,  the  fol- 
lowing number  of  utilities  municipally  owned: 


TABLE  NO.  1 

MUNICIPAL  OWNERSHIP  OF  UTILITIES  IN  THE  50  LEADIN0  QTI 
GREAT  BRITAIN  AND  A  UKE  NUMBER  IN  GERMANY 

Number  Municipally  Owned  in 

Kind  of  Utility  or  ESnterpfffse— 

Water  Supply  

Bleetric  

Has  

TranmajTB  

Baths  

Markets  . . 
flisnaiiter  Houses 


OF 


Total 


•  ■  <t  • .  < 


Great  Britain  f 

Germany 

Units 

No. 

Percent 

No. 

Per  Cent. 

Each. 

78.0 

48 

96.0 

50 

88.0 

42 

84.0 

60 

42.0 

50 

100.0 

50 

84.0 

28 

48.0 

60 

.  49 

98.0 

48 

96.0 

50 

88.0 

SO 

100.0 

50 

46.0 

48 

86.0 

50 

.MS 

74.86 

304 

88.88 

360 

Mai  and  per  cent  total  (tf  860*. . 

•^Total  Unit  of  360**  represents  the  possible  number  of  utilities  embraced 
under  the  heads  stren.  For  the  two  countries  combined,  the  100  cities  show  668 
oat  of  a  total  of  700,  or  80.86%  of  the  utilities  under  public  ownership. 

Totals  and  per  cents  computed  and  added  by  C.  K.  Mohler. 

(This  report  based  on  data  avaUable  in  1915.) 

[8] 


The  United  States  Census  Report  for  1912  gives  for  56  American  cities  of 
100,000  population  or  over,  the  following  number  of  utilities  under  public 
ownership: 

TABLE  NO.  2 

MUNICIPAL  OWNBESHIP  OF  UTILITIES  IN  56  LEADING  AMERICAN  CITIES 


No.  of  Utilities 

Kind  of  Utility  or  Total  Units      Publicly  Owned 

Enterprise —  Possible.      No.      Per  Cent.  Remarks. 

Water  Supply    56  49  87.5 

Gas  Supply   66  1  1.8  Richmond,  Va. 

Electric  Supply    58  7  12.6 


Total  and  %  of  total  of  168  168  67  33.93 

Of  139  additional  American  cities  with  a  population  of  over  thirty  thousand 
and  under  one  hundred  thousand,  the  same  source  of  information  gives  their  pub- 
lic ownership  of  utilities  as  follows: 


TABLE  NO.  3 

MUNICIPAL  OWNERSHIP  AND  OPERATION  OF  UTILITIES  IN  139  AMERICAN 
CITIES  WITH  A  POPULATION  OF  OVER  30,000  AND  UNDER  100,000 


Number  of  Utilities 
Total  Units  Publicly  Owned. 


Kind  of  Utility  or  Enterprise- 

Possible. 

No. 

Per  Cent. 

 139 

101 

72.66 

  139 

4 

2.88 

12 

8.63 

  417 

117 

28.08 

TABLE  NO.  4 

COMPARISON  OP  MUNICIPAL  OWNERSHIP  IN  FIFTY  OF  THE  LARGEST 
CITIES  OF  GREAT  BRITAIN  AND  GERMANY  AND  phtY-SDC 

m  THE  UNITED  STATES 


—Ownership  of  Three  Leading  Utilities —  Inclu- 
No.of    Water         Gas        Electric       Total  stve 
Country—  Cities.  No.  P.C.  No.    P.O.  No.  P.O.  No.  P.O.  TotaL 

Great  Britain*   .  .  60     39     78.0     21     42.0     44     88.0    104     69.3  150 

Germany   ...  50     48     96.0     50   100.0     42     84.0    140     93.3  150 

United  Statest    56     49     87.5      1      1.8      7     12.5     57     33.9  168 


Total  and  %  of  468..  166   138     87.2     72     46.1     93     69.6   301     84.3  488 

♦The  small  percentage  of  gas  plants  owned  in  Great  Britain  is  on  account  of 
the  early  grants  having  been  given  in  perpetuity,  and  now  results  in  much  difficulty 
and  expense  in  a  municipality  taking  over  the  utility. 

tThe  showing  for  ownership  of  electrical  plants  in  the  United  States  is  to 
a  degree  misleading,  as  a  number  of  cities  counted  as  having  municipal  ownership 
are  in  fact  supplied  almost  wholly  by  private  companies. 

Examples— Los  Angeles,  Cleveland,  Chicago,  etc.  Others  are  supplied  in  part 
from  private  plants,  such  as  Pasadena. 

Some  of  the  American  cities  listed  as  having  municipal  water  supplies  are 
also  supplied  in  part  from  privately  owned  plants,  among  which  are  Los  Angeles, 
San  Francisco,  Pittsburg,  New  York,  etc. 

Of  the  195  American  cities  above  considered  only  two  (Holyoke,  Mass.,  and 
Hamilton,  Ohio)  own  all  three  supplies,  water,  gas  and  electricity.   Of  the  19 

[9] 


WWaiig  Ui^  electric  plants,  all  own  their  water  supply  except  one  (Joplin, 
mnoari). 

After  €0ii8iderinir  the  relative  number  of  utilities  owned  liy  ESoropeaii  and 
American  cities,  it  will  be  interesting  to  compare  the  bonded  indebtedness  for  pro- 
ductiye  and  non-productive  undertakings,  incurred  by  seven  German  and  a  like 
number  of  American  cities  of  about  the  same  relative  size.  To  again  quote  from 
Howe's  "Bmopean  Otfee  at  Work,"  after  making  computations  to  obtain  the  per 
capita  indebtedness  in  each  city  and  the  totals  of  population  and  debt  and  per 
cents  of  total  debts,  we  cet  the  following  tabulation  (see  table  No.  5) : 

9or  general  Information  and  comparison  the  bonded  indebtedness  of  Los  An- 
geles was  compiled  and  the  per  capita  aaoiint  for  different  purposes  computed 
(see  table  No.  : 

TAMiB  NO.  5 

DBBT  FOR  REVl^nJB  AND  NON-REYBNUB  PRODUCING  UNDER- 
TAKINCM3  IN  VARIOUS  CSITIBS  OF  THB  17NITED 
STATES  AND  CmBXANY 

— "Total  Debt—       —Prodactiye—  — Non-ProdnctiTe — 
Aggre-       Per       Aggre-       Per      Aggre-  Per 
gate.      Capita.     gate.      Capita.      gate.  Capita. 

OafnNin  Cities 


City—  Population 


Berlin  

1.001,032 

$99,254,000 

$49.60 

$64,767,000 

IS2.27 

134.512.000 

n7J5 

Siberf  eld . . . 

168,000 

13,595,000 

80.92 

7,252,000 

43.16 

6,392,600 

38.05 

Solingen  ... 

50.961 

3,285,000 

64.46 

2,257,000 

44.29 

1,029,000 

20.19 

HaUe  

176,798 

9,500,000 

53.73 

2,877,000 

16.27 

4,612,000 

26.08 

Magdeburg.. 

247.S58 

15,005,000 

60.66 

7,775,000 

21.43 

7.503.900 

30.34 

Bemtfield  .. 

69,700 

3,930,000 

56.38 

2,790,000 

40.03 

1447,000 

16.46 

Dnaseidorf  . 

884.439 

28.585,000 

100.50 

22.260.000 

78  J6 

6327.000 

22.24 

Totalt . . 

2,998.288  $171,501,500 

$57.20  $109,978,000 

$36.68 

$61,523,500 

$20.52 

Percentage  of  total  debt   6402% 

Citiea  or  the  United  Statee 


35.88% 


Philadelphia  1,526,383 

$99,355,026 

165.09 

$30,776,642 

$20.16 

$68,578,384 

$44.93 

develand  . 

538,374 

37.304,908 

69.30 

5.613,684 

10.43 

31.691,224 

58.86 

Minneapolis. 

294,330 

14,927,202 

50.72 

1,933,424 

6.67 

12,992,424 

44.14 

Indianapidis. 

228,690 

4,790,401 

20.95 

22,000 

.96 

4,768,401 

20.85 

Denver  .... 

207.112 

5,814,419 

28.07 

329,200 

15.89 

5,485,219 

26.48 

Omaha  .... 

122,187 

8,598,997 

70.38 

•  ••••••••• 

•••••• 

•  «  •  •  •  • 

CMrand  Rapids 

110,060 

3448,612 

28.61 

1,137,500 

10.33 

2,047,112 

18.60 

Total... 

3.037,136  1165.376.568 

154.45 

$39,812,450 

$13.11  $125,564,118 

$41.34 

tts  ftf  total  debt   24.07%  75.93% 

Note— fTotal  of  ccdnmn  three  does  not  agree  with  that  obtained  from  columns 
ftve  and  sefciL  Percentages  mn  computed  from  eiAuBms  five  and  seven  totals. 


TABLE  NO.  da 

DETAILS  OF  LOS  ANGHLBS  CITT  AND  (COUtNTT  BOAD  BONDS) 

Los  Anteiesi  500.000*  $50,682,038  $101.36  $38,885,850  $77.77  $11,796,188  $23J9 
L.  A.  Ommtyt  700,000*      2.428.570     4.86   2.428.570  4.86 

(unsold)....         2,054,000     4.11       2,054,000  4.11   


Total. 


  $55,164,608  $110.33    $40,939,850    $81.88    $14,224,758  $28.45 

Total  less  unsold 

electrlct    53.110,608   106.22     38,885,850     77.77     14,224,758  28.45 

^Bstimated  population. 

SSee  table  number  six  for  detail  ot  Los  Angeles  bonds. 
tThe  amount  of  County  bonds  shown  is  5/7  of  the  total  road  bond  issue  of 
$3,400,000,  approximately  the  city's  proportion. 

tMarch  1.  1915.  Note:   Headings  of  Table  5  also  cover  5a.  . 

[10] 


TABLE  NO  6 

BONDED  INDEBTEDNESS  FOR  CITY  OF  LOS  ANGELES.  COMPRISED  OF 
CITY  ISSUES,  L.  A.  CITY  SCHOOL  DISTRICTS,  AND  CITY'S  PRO- 
PORTION OF  COUNTY  ROAD  BONDS.  ON  MARCH  1.  1916 

(Data  Furnished  by  City  and  County  Auditors.  Mardi  28.  1916.) 


 Bond  Debt  

Issued  for—  Aggregate.        Per  Capita. 

Non- Revenue  Producing 

City,  Miscellaneous  |  2,406,988  $  4.81 

L.  A.  City  School  District                                            9,389,200  18.78 

li.  A.  County  Road  Bonds*                                          2,428,570  4.86 

Total    ......114.224.758  $28.45 

*5/7  of  $3,400,000,  City's  proportion. 

fleveniie  Producing 

City  Water  and  Aqueduct  $25,869,850  151.74 

City  Electric  Plantf                                                  7J46.000  15.89 

City  Harbor                                                           6.070.000  10.14 

Total  $38,885,850  $77.77 

t$2.054.000  yet  to  be  sold. 

Add  Electric  to  be  sold  gives  total  Mectric          10.000,000  20.00 

City  total  I      $40,939,850  |81.88 

Combined  Revenue  and  Non- Revenue  Producing 

L.  A.  City  School  District  $  9,389,200  $18.78 

L.  A.  County  Road  Bonds                                           2,428,570  4.86 

City  total  issue                                                      42,346,988  86.69 

'  Total  «rf  aU  iasoes  |SeA<4^  tUO.33 


GENERAL  SUMMAEY  OF  MUNICIPAL  OWNEKSHIP 
IN  GREAT  BRITAIN,  GERMANY  AND 
THE  UNITED  STATES 

A  glance  at  Tables  Nos.  1.  2,  3  and  4  will  show  to  what  extent  British  and 
German  cities  have  surpassed  those  of  the  United  States  in  establishing  and  con- 
ducting municipal  undertakings. 

Regardless  of  criticism  and  attacks  directed  at  municipal  ownership  of 
utility  undertakings,  it  can;  be  only  a  matter  of  time  until  all  service  of  this 
nature  is  taken  over  by  tlie  governing  agencies.  The  results  obtained  in  the 
larger  cities  of  Great  Britain  and  (Germany  have  been  so  generally  and  emi- 
nently satisfactory  that  a  return  to  private  ownership  is  never  advocaetd.  The 
ownership  of  water  supplies  in  American  cities  is  universally  accepted  as  cor- 
rect and  sound  in  principle  and  wholly  desirable.  Of  the  cities  having  over 
an  hundred  thousand  population  seven -eights  of  them  now  own  their  water  sup- 
plies, and  none  are  returning  to  private  ownership.  On  the  contrary,  some  cities 
are  spending  large  amounts  to  secure  or  extend  municipal  supplies.  San  Fran- 
cisco and  San  Diego  may  be  noted  in  this  particular. 

In  contrast  to  the  showing  for  water  supply  ownership,  note  the  fact  that 
all  or  100%  of  the  gas  supplies  in  the  fifty  largest  German  cities  are  publicly 
owned.  The  showing  for  the  largest  American  cities  is  only  one  out  of  fifty-six, 
or  1.8%. 

im 


In  many  respects  the  business  of  supplying  gas  is  not  materially  different 
ttom  Uiat  of  svppiyiag  water.  TblB  la  especially  true  of  natural  gas.  It  is  haird 
In  imderstand  why  no  more  has  been  done  by  American  cities  in  taking  over  or 

establishing  their  own  gas  supplies.  Possibly  it  is  for  the  lack  of  a  few  good 
examples  to  begin  with  and  the  development  of  popular  policy  along  that  line. 
Woat  good  examples  in  this,  as  well  a.s  in  many  other  things  we  may  look  to 
Bnropean  cities. 

Again  referring  to  TaUe  No.  1,  we  see  to  what  extent  European  cities  have 
made  progress  in  the  ownership  of  their  water,  gas  and  electric  supplies,  street 
railways,  baths,  markets  and  slaughter  houses.  American  cities  show  adyance 
progress  for  their  ownership  of  winter  supply  only. 

PMladelpliia  owned  its  own  gas  works  and  operated  them  up  to  about  fifteen 
fears  ago,  when  they  were  laawi  to  yilfate  parties  by  the  notorioits  gaacBters 
of  that  mmiicipality. 


MUNICIPAL  OWNERSHIP  IN  LOS  ANGELES 

In  1901,  bonds  were  voted  by  the  city  in  the  amount  of  $2,000,000  for  taking 
over  the  Los  Angeles  City  Water  Company  property.  In  1904,  $337,000  bonds 
wete  noted  and  tlie  West  Side  Water  Company  and  the  West  Los  Angeles  Water 
Oompany  properties  were  taken  over  by  the  city.  In  the  same  year»  1150,000  of 
tends  were  also  issued  for  constructing  Silver  Lake  Reservoir. 

How  many  private  water  companies  were  still  in  existence  at  that  time  is 
not  definitely  known.  In  1910,  and  up  to  1914,  there  were  still  eighteen  private 
emnpanies  ^fins  sRTlee.  The  etty  has  been  buying  up  these  private  companies* 
from  time  to  time,  mHH  there  are  now  ten  fumishtag  senrice  inside  the  dty  limits. 
Most  of  these  concerns  were  and  are  small  with  few  customers.  Their  rates  were  and 
are  invariably  high  and  in  some  cases  the  service  extremely  bad  and  the  quality 
of  water  poor.  Their  origin  was  generally  inspired  through  real  estate  specula- 
tion. 

Wafesr  Serviee 

The  rates  for  wator  at  the  time  the  first  plant  was  taken  orer  by  the  city 
were  nearly  three  times  what  they  have  been  most  of  the  time  since.  The  M 
wmm  and  redactions  were  aa  follows  (shown  In  Table  Ho;  6a.): 


TABLB  NO.  6a 

WATER  RATES,  LOS  ANGELES  MUNICIPAL  PLANT  1902—1916 


 Rates  and  Amounts  

Under  Ownership  of— 

 Date  

Per  100 

Minimum 

Covering 

Month. 

Year. 

Cu.  Ft. 

Mon'ly  Bill. 

Amt.Cu.Ft. 

•  •  •  • 

20c 

$1.50 

♦800? 

....  ^^0^. 

190S 

16  to  10  J 

1.60 

11007 

1902 

16  to  10  J 

1.00 

1100? 

1902 

7c 

1.00 

1100 

1907 

7c 

.75 

1100 

8bic«  the  date  of  the  report  the  minimum  monthly  bill  has  been  reduced  to  $0.50. 
*»£MARKS— Over  2000  cubic  feet,  15c. 


The  value  of  the  Los  Angeles  City  Water  Company  plant  at  the  time  it  was 
acquired  by  the  city  was  placed  by  different  appraisers  at  from  $1,250,000  to 
over  14,000,000.  The  appraisal  on  which  negotiations  were  finally  based  was 
$1,800,000.  The  purchase  price  was  $2,000,000.  If  the  base  valuation  was  correct 
llien  the  eltj  paid  $100,000  or  111  per  eent  mm  than  the  property  was  worth. 
Sven  so,  it  is  ganetallj  eonoeded  a  wise  move  to  make  the  purchase. 

The  city  ownership  has  been  entirely  satisfactory.  Worthless  sheet  iron  pipe 
has  been  replaced  with  standard  cast  iron  and  hundreds  of  miles  of  extensions 
made.  To  an  $1,800,000  plant  additions  were  made  in  13  years  increasing  its 
vnlae  to  nearly  $11,000,000.  This  aeecmipllshed  under  the  reduced  rates  ahore 
shown;  and  fixed  charges  for  original  purchases  carried.  Net  profit  earned  in 
1915  over  $400,000.  The  Water  D^artment  up  to  and  ineludtaf  1916  did  not 
earry  the  aqueduct  fixed  charges. 

In  1905,  the  first  bond  issue  of  $1,500,000  was  authorized  for  preliminary 


work  on  the  aqueduct.  Since  then  large  amounts  of  bonds  have  been  voted  for 
the  construction  of  the  aqueduct  and  in  addition  for  power  development  along 
the  aqueduct,  and  for  building  a  harbor  at  San,  Pedro. 

The  aggregate  amounts  of  the  bond  issues  for  these  and  other  purposes  are 
given  in  Table  No.  6.  It  is  not  the  purpose  to  discuss  the  harbor  in  this  report, 
other  than  to  remark  that  generally  the  ownership  and  control  by  a  municipality 
over  its  harbor  facilities  is  essentially  desirable. 

Bonded  Debt,  Earnings,  Etc. 

In  comparing  the  bonded  indebtedness  of  seven  other  American  and  a,  Uke 
number  of  German  cities,  as  shown  in  Table  No.  5,  It  wUl  be  seen  that  the  Los 
Angeles  people  have  been  optimistic  of  the  future.  In  only  one  other  city 
shown,  Dusseldorf ,  does  the  per  capita  indebtedness  approach  that  of  Los  Angeles, 
$100.50  and  $110.33  respectively.  The  amount  of  the  per  capita  debt,  represented 
by  revenue  producing  utility  bonds,  is  for,  Dusseldorf  $78.26,  Los  Angeles  $81.88. 

In  addition  to  the  bond  issues  above  referred  to,  the  city  constructed  m 
municipals  railway  on  San  Pedro  street  from  Aliso  to  Ninth  street,  at  a  cost 
of  a  little  over  $248,350.  This  has  been  leased  to  the  Pacific  Electric  Railway 
for  a  term  of  seven  years.  For  the  use  of  the  track  the  railway  company  pays 
the  city  annually  5  per  cent  of  the  cost  of  construction,  plus  $1200.  As  nothing 
was  included  in  the  contract  for  depreciation  the  city  suffers  a  loss  of  from 
twenty  to  twenty-five  thousand  dollars  a  year  (based  on  a  ten  to  twelve  year 
Itfe  of  track). 

The  total  issue  of  bonds  designated  as  revenue  producing  Is  $40,939,850  or 
as  previously  stated  $81.88  per  capita.  Add  to  this  the  possible  loss  of  $240,000 
on  the  contract  with  Pacific  Electric  Railway  for  the  use  of  the  San  Pedro  street 
Une  and  we  get  $41,187,850,  or  $82.37  per  capita. 

Without  any  revenue  returns  from  any  of  these  enterprises  the  annual  tax 
levy  per  capita  must  provide  for:  Interest,  about  $3.70;  sinking  funds,  about  $2.00. 
This  gives  a  per  capita  total  of  about  $5.70  or  a  gross  total  of  about  $2,850,000 

for  the  entire  city.' 

The  net  earnings  of  the  water  department  for  1915  was  $410,000.  None  of 
this,  however,  has  been  taken  to  apply  to  the  interest  and  sinking  fund  of  the 
aqueduct  and  water  bonds,  which  in  1914-15  amounted  to  about  $1,820,000  and 
was  all  paid  out  of  the  annual  tax  levy,  except  $128,940.  The  interest  and  sinking 
fund  for  harbor  bonds  was  $368,150.  The  net  earnings  of  the  Harbor  Department 
above  operating  expenses  was  $40,000.  That  left  a,  balance  of  $328,150  to  be 
taken  care  of  by  taxation.  (Since  the  above  was  written  the  data  for  1915-16 
has  become  available.  The  Water  Department  paid  in  about  the  same  as  the 
year  previous.   The  Harbor  Department  turned  in  no  revenue  to  the  treasury). 


FUTURE  MUNICIPAL  OWNERSHIP  IN  LOS  ANGELES 

This  subject  will  be  considered  under  ftiur  divisions:  First— Transportation 
or  street  railways.  Second— Water  supply.  Third— Gas  supply.  Fourth— Electrio 
supply.  It  is  not  the  intention  to  go  fully  into  the  street  railway  and  trans- 
portation and  water  questions  in  this  report.  (The  telephone  and  telegraph 
properly  belong  to  the  Federal  Postal  Service.) 

1.   THE  MUNICIPAL  RAILWAY,  ETC. 

The  city  has  the  rli^it  to  terminate  the  contract  with  tilie  Pacific  Electric 
Hallway  on  one  year's  notfoe.  In  view  of  the  manifest  inequity  and  injustice  of 
the  contract  to  the  tax-payers,  we  believe  the  city  is  fully  justified  in  undertak- 
ing to  serve  notice  on  the  company  that  the  present  contract  will  be  terminated 
and  a  new  one  required  on  terms  that  will  insure  the  city  against  any  such  loss 
as  it  now  sustains  of  from  $20,000  to  $25,000  a  year. 

A  prai^cal  move  toward  municipal  ownership  may  be  accomplished  by  the 
dty  making  necessary  extensions  of  transportation  lines,  building  tunnels,  etc., 
and  leasing  the  operating  rights  for  adequate  rentals,  until  such  time  as  the 
municipality  is  ready  to  undertake  railway  and  transportation  operation. 

The  Harbor  Department  has  made  substantial  and  commendable  progress 
toward  establishing  rail  Ihies  to  serve  the  harbor.  This  work  should  be  con« 
tinned  and  th^  policy  established  of  the  city  ultimately  owning  or  ccmtrollinc 

[13] 


an  rail  and  water  teniiliiala,  t«setti«r  wltli  marlmtiag  fadiltlea  witWn  the  city 
iiinita. 

1.   WATER  SUPPLY 

The  atneduct  water  was  brought  into  the  San  Fernando  Valley  over  two  years 
ago.  Up  to  tlio  promt  we  have  made  UtUe  use  of  it  and  are  securing  only 
iaiail  returns. 

This  water  is  intended  primarily  for  "future  domestic  supply."  The  present 
Immediate  use  of  the  major  portion  can  be  devoted  only  in  the  to  irriaa- 
tion  puriKNtea  as  ''surplus." 

Table  No.  €  shows  the  total  ovtatanding  bond  iaaae  for  water  to  be  $25,869,850 
or  151.74  per  capita.  The  majcar  portkm  of  these  bonds  are  itf  the  40-year  series, 
with  from  one -thirty -fourth  to  one-fortieth  of  the  series  retired  each  year  throng 
the  redemption  or  sinking  funds.  At  the  present  time  the  annual  per  capita 
sinking  fund  amounte  to  about  $1.66.  The  per  capita  interest  is  about  $2.33  Total 
^ual  charge  pa*  capita  ta  carry  the  aqueduct  $3.99.  The  average  monthly 
water  bill  per  meter  in  the  city  at  the  preesnt  time  is  from  |1.50  to  $1.60.  It  is 
estimated  by  the  Bureau  of  Water  Supply  that  one  meter  serves  on  the  average 
5r  %  ^  average  monthly  bill  of  $1.55  we  get  the  total  average 

annual  hiU^|18.60.  Reduced  to  the  per  capita  basis  gives  $3.72.  If  we  now  add 
to  ubejpir  capita  metor  rate  of  ^.71  the  aquednct  bond  interest  and  sinking  fund 
off  ISJf  we  get  a  total  annual  per  capita  water  rate  ta  17.71. 

If  at  the  present  time  the  cost  of  the  water  service,  inchiding  fixed 
^arges  on  the  city's  aqueduct  or  future  water  supply,  were  taken  care  of  by  the 
the  rates,  instead  of  in  part  by  the  tax  levy,  they  would  have  to  be  increased 
to  ow  doahle  those  now  tiiarged,  or  to  about  $38.55  as  the  annual  bill  This 
means  that  the  city  could  not  afford  to  tax  iteelf  and  seU  water  to  territory  out- 
side the  city  boundary  at  the  same  rate  that  it  is  now  seUing  inside.  It  may 
he  remarked  that  reports  from  other  cities  show  rates  as  high  as  26^c  and 
as  low  as  3c  per  100  cubic  feet,  as  compared  to  the  approxiamte  14i^c  rate  in- 
meated  9bow  neeessary  to  make  the  Loa  Angeles  system  self-supporting.  With 
the  aqueduct  water  in  service,  enough  revenue  should  be  derived  to  care  for  the 
mterest  and  sinking  funds  of  the  bonda,  as  wall  aa  to  make  necessary  eztmisiona 
and  return  a  profit. 

An  ^▼SW  meter  biU  per  annum  of  $18.60,  at  7c  per  100  cubic  feet  indicates 
m  consumption  of  t€fin  enMc  feet  per  meter.  That  amount  at  the  prevailing  rate 
tor  most  outside  cities  of  15c  per  100  cubic  feet  amounts  to  IS9.86.  The  present 
city  charge  of  $18.60  plus  interest  and  sinking  fund  of  $19.95  amounts  to  18865 
or  a  savmg  of  $1.31  per  meter,  or  (five  people  per  meter)  to  $0.26  per  capita 
per  annum.  As  the  bonds  are  redeemed  and  the  interest  charges  gradually  re- 
duced the  net  savteg  per  c^ta  gradually  increases,  until  the  end  of  the  last 
bond  period  when  both  interest  and  sinking  fund  charges  disappear. 

Prom  the  fact  that  all  real  property  within  the  city  limits  shares  in  the 
potential  benefits  of  the  large  assured  future  water  supply,  the  annual  direct 
tax  levy  for  taiterest  and  sinking  fund  on  the  aqueduct  bonds  may  be  considered 
equitable.  Present  water  nsera  dMNdd  not  he  made  to  pay  for  the  benefits  to 
land  not  in  use. 

In  the  committee's  estimation  the  city  should  lose  no  time  in  perfecting  ar- 
rangements whereby  the  widest  distribution  of  water  can  be  secured,  on  an 
Ofaitahle  basis,  to  those  desiring  its  use. 

8.    GAS  SUPPLY 

A-J]?**^*'-SS!!:  2  "'^  ^  show  that  only  five  out  of  195,  or  2.56%  of  the  largest 
mmmeam  ^ties  own  their  own  gas  supply.  Supplying  gas,  as  before  stated,  is 
not  very  different  from  supplying  water.  In  fact,  the  equipment  fOr  supplying 
natural  gas  is  almost  identical  with  that  far  water  service.  The  service  Js  ren- 
dered principally  through  the  use  of  machinery  and  pipe  conduite,  the  number 
of  persons  employed  being  relatively  small. 

I4W  Angeles  has  been  •carrying  on  a  gas  supply  and  rate  controversy  extend- 
ing something  over  three  yearn,  and  no  definite  setUement  is  yet  in  sight  Con- 
troversies of  this  nature  are  not  peculiar  to  Los  Angeles. 

About  76%  of  the  gas  supply  for  Los  Angeles  is  furnished  by  the  Los  An- 
gel^ Gas  and  Electric  Corporation.  Generally  the  price  of  gas  in  Los  Angeles  has 
laail  baaed  on  the  equipment  and  service  of  this  concern.  It  has  also  been  the 
CMto  Of  tha  ootttrovenqr  ovar  talet  and  aervlee. 

CH] 


The  corporation's  sales  of  gas  for  1915  were  3,826,282  thousand  cubic  feet, 
of  mixed  half-and-half  artificial  and  natural,  at  68c  per  thousand.  The  price 
for  natural  gas  in  other  cities  of  the  United  States  is  from  27  to  40c  or  an  average 
for  three  different  cities  of  32.3  cents.  There  appears  to  be  more  than  ample 
natural  gas  available  to  serve  the  needs  of  Los  Angeles.  An  increase  of  20% 
in  the  average  price  for  natural  gas  in  other  cities  ^ves  less  than  39c  per  1000 
cubic  feet. 

The  total  depreciated  value  of  the  gas  equipment  of  the  Los  Angeles  Gas  and 
Mectric  Corporation,  as  determined  by  the  State  Railroad  Commission  is 
$10,747,000.  The  total  amount  of  ontetanding  bonds  of  the  corporation  is  about 
18,225,000,  bearing  5%  interest. 

It  may  be  fairly  assumed  that  the  prices  for  natural  gas  in  other  cities  hwro 
generally  been  established  by  the  companies  furnishing  the  service.  If  sudi  is 
the  case  the  presumption  is  natural  that  they  have)  allowed  themselves  a  fair 
profit.  As  above  stated,  an  addition  of  20%  to  the  average  price  for  other  cities 
gives  less  than  39  cents  per  1000  cubic  feet.  In  taking  over  the  major  portion 
of  the  water  service,  the  city  was  able  to  reduce  rates  to  from  one -half  to  one- 
third  of  that  charged  by  the  private  companies.  If  that  is  any  criterion,  it  may 
he  fair  to  assume  that  If  the  natural  gas  service  were  carried  on  at  the  least 
possible  -cost  without  profit,  that  the  rate  could  be  reduced  to  about  38c  per 
1000  cubic  feet,  approximately  44%  less  than  the  present  rate,  and  20%  higher 
than  the  average  paid  by  other  cities.  A  saving  of  30c  per  1000  cubic  feet  on 
3,826,282  thousand  cubic  feet  amounts  to  $1,147,885  annually. 

Thb  Los  Angeles  Gas  &  Electria  Corporation,  according  to  reports  of  the 
recent  hearing  before  the  State  Railroad  Commission,  claims  it  is  entitled  to 
returns  of  8%  on  a  valuation  of  $14,000,000  or  $1,120,000  annually.  This  is  about 
$600,000  above  the  normal  interest  charges  on  the  valuation  fixed  by  the  Hailroad 
Commission.  We  have  not  had  the  time  or  facilities  to  undertake  an  exhaustive 
investigation  and  analysis,  but  from  such  study  as  we  have  made  there  seems  a 
fair  presumption  that  from  $500,000  to  $1,000,000  could  be  saved  annually  to  the 
gas  consumers  of  the  city  through  the  acquisition  of  this  one  concern. 

4.    ELECTRIC  SUPPLY 

Again  referring  to  Tables  2  and  3,  we  find  that  of  the  195  largest  Am^can 
cities  there  considered  only  19,  or  9.7%,  own  electric  plants.  Of  these  same 
cities  150,  of  77%,  own  water  supplies. 

It  is  not  necessary  to  recount  the  steps  already  taken  by  the  City  of  Los 
Angeles  to  establish  a  municipal  electrical  power  service. 

Tables  7  and  8  give  in  kilowats  and  the  per  cents  of  the  whole  for  all  power 
concerns  now  serving  Los  Angeles  and  vicinity  together  with  the  units  being 
established  and  proposed  by  the  city  as  part  of  the  aqueduct  project.  Itom  one 
of  Table  8  shows  that  the  city's  present  development  is  28,125  out  of  a  total  of 
315,225  K.  W.,  or  8.9%.  Item  three  of  Table  No.  8  gives  future  city  development 
as  126,820  out  of  a  total  of  413,920  K.  W.  for  all  or  30.6%.  Even  with  the  total 
future  development  proposed  by  the  city  it  does  not  appear  that  a  large  enough 
percentage  will  be  under  municipal  control.  The  above  totals  are  for  all  of 
Southern  California.  The  present  requirement  within  the  city  is  about  50,000  K.  W. 

In  connection  with  the  requirement  the  city  has  ahead,  of  establishing  a 
distributing  system  we  believe  the  move  might  very  well  be  considered  of  taking 
over  the  entire  electric  equipment  and  plants  of  both  the  Los  Angeles  Gas  and 
Electric  Corporation  and  the  Southern  California  Edison  Company.  Item  one  of 
Table  No.  7  gives  the  combined  capacity  of  the  "city  present"  and  all  others  as 
315,225  K.  W.  Item  three  gives  city's  future  combined  with  all  others  413,920  K.W. 
Deduct  the  Pacific  Light  and  Power  from  each  and  the  suggested  combination 
stands:  For  city  present  135,775  K.  W.,  or  43.7%  of  the  total;  for  city  future 
234,470  K.  W.,  or  56.6%  of  the  total.  As  the  greater  portion  of  the  output  of 
the  Pacific  Light  and  Power  Corporation  equipment  is  serving  railway  purposes, 
the  city  would  gain  a  fair  control  of  the  municipal  requirement  through  the  sug- 
gested combination  as  indicated  by  the  above  per  cents. 

Out  of  120,712  customers  the  Los  Angeles  Gas  and  Electric  Corporation  now 
serves  39,619,  or  32.8%,  and  the  Southern  California  Edison  Cmnpany  ^JM,  or 
44%.    These  combined  give  a  total  of  92,806,  or  77%. 

For  the  city  to  duplicate  the  existing  distributing  systems  will  entail  a 
large  degree  of  economic  waste.  On  the  other  hand  to  take  over  the  distributing 
systems  of  the  present  companies  and  deprive  them  of  customers  tor  their  prod- 
iicta  will  call  for  more  or  less  severance  damages. 


In  view  of  the  facts  just  stated  we  believe  the  city  will  be  fully  Justified  in 
vndertaking  as  before  suggested,  to  acquire  all  of  the  electric  eattiDment  of 
Wub  tim  fiompintes  sbore  coaMmd, 

It  ttnfli  ^  remembered  that  If  the  city  depends  on  tbe  aiiQedact  a]i»e  as  a 

source  of  power,  it  will  have  as  competitors  in  the  field  the  three  present  com- 
panies, completely  tied  in  with  each  other  (with  lines  and  substations  within 
the  city  at  least)  and  having  many  sources  of  supply,  both  steam  and  hydro - 

TAKUB  NO.  7 

EAITMD  CAPACITY  IN  KILOWATTS  OF  ELECTRIC  POWER  CONCERNS  IN 

LOS  ANGELES  AND  VICINITY 

Gapacity  in  Units  and  Per  Cents— 

  —Current  Developed  by — 

OWNSD  BY  ANB  COMBINATION   Water  Steam  

OBOUPS  OF  P.Cof  P.CHf 

TotaL  K.  W.  Whole.  K.W.  Whole. 

1.  Southern  CaUfomia  Edison  Company. .    89,850  81376     36.6     67,976  64J 

ImB  Angeles  Gas  &  Electric  Corporation   17,800   * .     17  800   100  0 

Pacific  Light  &  Power  Corporation          179,450  132,650     73.9     46^800  26a 

City  of  Loa  Angeles,  Plant   No.  1 
fyreaenl)  , 

Total  


Total  Private  Cos.  &  City  (full 


4.  L.  A.  Gas  and  Elec.  &  So.  CaL  Edison 


Total  L.  A.  Gas  &  El.  &  S.  C.  Edi- 


6,  City  Plants  Nos.  1  &  2  (full  develop- 
ment) and  L.  A.  Gas  &  Elec  Co.  & 


ib  City  Plant  No.  1  (present)  &  S.  C.  Edi- 
son Co  

7.  City  Planli  No.  1  (present)  A  U  A.  Gaa 

&  EL  ....   

8.  City  Plants  1  &  2  (fan  devetopBont)  Jb 

S.  C  Edis(Hi  Co.  

8.  CSItj  Plaats  1  ft  8  (fun  de?^pmeiit)  ft 
U  A.  Qas  ft  See.   

10.  Citar  Total  (future)  &  S.  C.  Edison  & 

Li  A.  Oas  

11.  City  Total  (future)  &  Sou.  Cal.  Edi- 

son  \X>  

IS.  City  Total  (future)  ft  U  A.  Gas  ft 
Elec  Co,  •..••.••.••.•«.••.«••.. • • . . 

£161 


88486 

88426 

100.0 

.  •  • 

316^ 

182.660 

614 

128.676 

88JI 

887400 
84,760 

164.686 
84»760 

67.8 
100.0 

188.676 
•••*.. 

48.7 

•  mm 

871,850 

249,276 

67.0 

122,575 

33.0 

126,820 
287400 

126,820 
164,525 

100.0 
57.3 

122,575 

•  •  • 

42.7 

418,880 

891,846 

70.4 

188.676 

29.6 

107,660 
88426 

31,875 
28486 

89.6 
100.0 

76.775 

70.4 

«  •  • 

135,775 

60.000 

44.2 

75,775 

56.8 

192,400 

116,625 

60.6 

75,775 

39.4 

117,975 

60,000 

50.8 

57.975 

49Jt 

46.886 

28426 

61.2 

17.800 

88.8 

174»«00 

116,686 

66b8 

67.976 

8M 

108,660 

84,760 

88.6 

17300 

17.4 

884.470 

168,696 

67.7 

75,775 

32.3 

216,670 

158,695 

73.2 

57,975 

26.8 

144.620 

126.820 

87.7 

17.800 

12J 

TABLE  NO.  8 


BLBCTRIC   POWER   DEVELOPMENT   IN   LOS   ANGELES   AND  VICINITY. 
TOTAL  AND  COMPARATIVE  AMOUNTS  OP  COMBINED  PRODUCTION 

— ^Amount  in  K.  W.  and  Per  Cents — 

i  ■     •  Ciliy.   -Companies- 

GROUP  COMPOSED  OF  Total  P.C.of  P.Cof 

K.  W.     K.  W.   TotaL  K.  W.  TotaL 


1.  aty  Plant  No.  1  (present),  S.  C.  Edi- 
son Co.,  L.  A.  Gas  ft  Elec  Co.  ft  Pa- 
cific Light  &  Power  Corp  

316,226 

28,126 

8.9 

287400 

914 

8.  City  Plants  1  ft  2  (full  development). 
S.  C.  Edison,  L.  A.  Gas,  ft  P.  L.  ft 

371,850 

84.750 

22.8 

287.100 

77.2 

3.  CJity  Total  Future,  Edison  Co..  L.  A. 
Gas  &  El.,  &  P.  L.  &  P.  Co  

413,920 

126,820 

30.6 

287.100 

69.4 

4,  City  Plant  No.  1  (present),  Edison  Co., 
&  L.  A.  Gas  &  Elec.  Co  

135,775 

28.126 

20.7 

107.660 

79.8 

6.  City  Plants  1  &  2  (full  development)  & 
Edison  Co.,  &  L.  A.  Gas  &  Elec.  Co.. 

192,400 

84,750 

44.0 

107,650 

66.0 

6.  City  Plant  No.  1  (present)  &  Edison  Co.  117,976 

28.126 

23.9 

89360 

76.1 

7.  City  Plant  No.  1  (present)  ft  L.  G.  Qbb 

46,926 

28.126 

6U 

17,800 

88.8 

8.  City  Plants  1  ft  2  (fuE  deyelopment) 

174,600 

84.760 

48.6 

89,860 

61J 

9.  aty  Plants  1  ft  2  (full  development)  ft 

L.  A.  Gas  &  Elec.  Co  

10.  City  Total  Future,  Edison  Co.,  &  L.  A. 

102.560 

84.760 

88.6 

17.800 

17.4 

11.  City  Total  Future  &  So.  Cal.  Edison  Co.  216,670 

126,820 
126,820 

54.1 
48.5 

107,650 
89,850 

45.9 
51.6 

12.  City  Total  Future  &  L.  A.  Gas  ft 

144,620 

126.820 

87.7 

17,800 

18.8 

REMARKS— Group  numbers  correspond  to  those  in  Table  No.  7  and  are  In- 
tended for  convenience  in  comparison. 


It  may  be  objected  that  much  of  the  generating  equipment  of  the  companies 
is  antiquated  and  inefficient.  That  is  undoubtedly  true.  If  purchased,  however, 
it  should  be  estimated  and  paid  for  only  as  such.  The  inefficiency  of  a  eertaln 
portion  of  an  equipment  which  is  maintained  only  to  bridge  over  temporary  break- 
downs or  for  taking  care  of  part  of  the  peak  load  for  a  short  period  is  of  so 
serious  disadvantage. 

The  depreciated  value  of  the  electric  equipment  of  the  Los  Angeles  Ctes  and 
Electric  Corporation  is  probably  between  four  and  five  million  dollars.  The 
depreciated  physical  value  of  the  Southern  California  Edison  Company  equipment 
is  probably  somewherei  between  $18,000,000  and  $20,000,000.  If  obsolesence  of 
antiquated  machinery  is  taken  fully  into  account  the  value  for  the  equipment  of 
rtther  of  these  c(»npanies  may  be  even  less  than  the  figures  Indicated.  We  have 
no  exact  figures  for  the  value  of  either  company's  property  or  plants.  All  of 
the  property  of  both  companies  outside  as  well  as  inside  the  dty  limits,  is  eon- 
sidered. 

At  the  recent  hearing  before  the  State  Railroad  Commission  one  witness 
claimed  that  the  value  of  the  Southern  CaUfomia  Bdison  Companjr's  plant  and 
business  was  $37,631,000.  Another  witness  claimed  that  a  return  of  8%%  on  the 
investment  was  insufficient.  The  company  has  in  the  neighborhood  of  $17,000,000 
5%  bonds  outstanding.  The  difference  between  high  returns  on  a  high  valuation, 
and  the  same  business  conducted  without  profit  will  amount  to  nearly  two  million 
and  a  half  dollars  a  year  for  this  property  alone. 

The  bonded  debt  of  the  Los  Angeles  Gas  and  Electric  Corporation  la  given  in 
the  discussion  on  gas  (covering  gas  and  electric  property)  as  I8J26.000. 

[17] 


MAOmrUDE  OF  THE  SUGGESTED  UNDEETAKING 


The  total  value  of  the  two  electric  plants  and  the  gas  plant  is  probahly 
somewhere  between  thirty-three  and  thirty-six  -.^b- 

A  proposal  lOr  the  city  to  acquire  any  or  aU  of  these  properties  will  pjod- 
mbly  be  ™i  at  once  with  the  objection  that  thei  city  is  already  overburdened 
vllh  bond  issues  of  the  revenue-producing  type.  That  is  true  to  a  degree,  as 
indicated  previously,  however,  we  must  adopt  a  policy  to  secure  larger  returns 
on  the  money  already  invested.  .  ^   ^  * 

It  should  be  understood  that  the  properties  proposed  to^  be  taken  over  are 
m^lm  eonccnis  and  are  not  only  paying  their  way  but  returning  a  good  Proflt  to 
tlM?  owners.  It  is  for  the  purpose  of  saving  this  proflt  to  the  consumers  that 
the  proposal  is  made  for  undertaking  municipal  ownership. 

The  City  Charter,  SecUon  2.  subdivision  (7)  (A)  (B)  and  (C>  and  BecOm 
m  subdivision  (2).  contains  prorislcms  for  taking  over  publicjitility  enter- 
wAm.  These  provisions  seem  to  be  adequate  and  equitable.  We  have  legal 
Winion.  stating  the  belief  that  the  charter  provisions  and  the  state  law  are 
adequate  for  taking  over  the  properties  by  condemnation  "fcessary.  b<^  to- 
glde  and  outside  the  city  limits.  We  need  not  be  tteiid  ^out  the  sise  of  our 
enterprises  whm  we  vidertnke  them  honestly  and  with  intelligence. 

m  etate  the  case  very  plainly.  If  the  city  owned  these  utilities  at  the 
preeent  time  we  should  be  saving  from  one  to  two  million  dollars  annually  to  the 
consumers  which  now  goes  to  the  owners  in,  profits.  Not  profits  ^Vl^J^^J^. 
considered.  The  removal  of  that  amount  of  utility  value  from  the  Md  of  POl>a«al 
activity  and  proesurs  is  one  of  the  meel  Important  objects  to  aeeompllsh  through 

municipal  ownership.  .  t  ^  *,u-  ..♦sis*^ 

Our  American  cities  have  too  long  been  run  in  the  intcreste  of  the  utility 
corporations  and  public  work  contractors.  We  continually  hear  the  charge  of 
Inefficiency  in  municipal  administration  and  corruption  and  graft  In  ttie  public 
sirtice.  Theee  very  evUs*  howevert  are  chargeable  mostly  to  the  pernicious  In- 
Hmnmcti  just  mentioned,  together  with  other  selfish  interests. 

America's  democracy  as  exemplified  in  our  cities  must  and  will  make  good. 
Let  us  therefore  take  the  lead,  in  so  far  as  we  may,  in  aocomplishing  this  entf, 
and  give  earnest  consideration  and  effort  to  one  of  the  most  Important  factors 
In  the  aecompllslHiient  of  ifile  purpose,  namely,  the  Intelligent  egctention  of 
munielpai  eweneraWp  of  puMlo  Htliitien* 


CITY  CLUB  COMMITTEE  ON  MUNICIPAL 

OWNERSHIP 

Report  approved  September  27. 191<»  by  the  committee  and  recommended  to 
the  Board  of  Gkivenim  f or  pabitettai: 

lf<ym~8ince  the  above  date  Mne  additional  data  has  been  obtained  mid 
fleieffal  revisioiis  madew 


(ttgned) 


MAETIN  BBKINS. 

RALPH  BENNBTT. 

H.  STANOnr  BBNBDICT. 

T.  B.  GIBBON. 

8.  C.  GRAHAM. 

JOHN  R.  HATNBS. 

a  W.  KOINER. 

RAT  B.  NIMMO. 

GHAROIS  K.  MOHLER, 

Chairman. 


Ordered  printed  by  the  aub  June  30,  1917. 

[183 


SUPPLEMENTAL  &EPOBT  ON  THE  EXTENSION  OF 
PUBLIC  OWNEESHIP  OF  PUBLIC  UTILITIES 

In  September,  1916,  the  committee  submitted  a  report  giving  a  general  sur- 
vey of  the  ownership  of  public  utilities  in  the  United  States,  Great  Britain  and 
Germany,  together  with  the  accomplishments  of  Los  Angeles  in  municipal  owner- 
ship up  to  tlia:t  time,  and  certain  recommendations  for  future  acquisitions  and 
extensions. 

Many  complains  are  heard  about  the  high  cost  of  living,  excessive  taxes,  in- 
elBeiency  and  graft  in  public  service,  and  others  of  a  like  nature.  In  this  con- 
nection it  may  be  of  interest  and  value  to  show  roughly  the  actual  as  well  as 
the  relative  value  of  property  devoted  to  utility  service  and  the  cost  of  the  serv- 
ice of  different  kinds  rendered  by  the  different  goTOming  agencies  and  the  vari* 
ous  privately  owned  utility  concerns. 

The  constant  and  rapid  concentration  of  population  in  large  centers,  the  in- 
vention, adoption  and  extensive  use  of  new  utility  appliances,  as  well  as  the 
constantly  growing  expense  of  "service"  administration,  caused  by  the  necessary 
adoption  and  extension  of  new,  scienUfic  and  highly  J|H  |||P||^ 
general  good  of  the  community  life  and  interest,  callJHpa  foirly  comprehen* 
sive  view  and  understanding  of  the  actual  and  relative  costs  of  different  kinds  of 
community  service.  As  far  as  the  committee  is  able  to  Judge,  the  general  public 
has  very  little  actual  or  comparative  information,  in  convenient  form,  on  these 
important  lines. 

The  original  report  may  very  well  be  supplemented  by  data  showing: 

First — The  approximate  value  of  property  owned  by  the  governing  agencies 
(when  it  can  be  given)  devoted  to  public  use;  the  value  of  municipal  or  public 
property  created,  or  carried  out  under  private  contract;  and  the  value  of  utility 
concerns  under  priva,te  ownership,  rendering  public  service  in  the  community  or 
municipality. 

Second — The  actual  and  relative  annual  cost  of:  Service  rendered  to  the 
public  by  publicly  owned  and  operated  institutions;  public  work  done  under 
private  contract;  and  utility  service  rendered  by  concerns  under  private  ownership. 

Third — ^The  incentives  for  political  activity  and  participation  in  govern- 
mental ailairs  by  the  private  interests  engaged  in  contract  work  as  well  as  those 
in  utility  service,  and  the  need  for  extending  public  ownerihip  of  public  service 
utilities. 

Such  information  as  was  obtainable,  with  a  reasonable  amount  of  work  and 
research,  is  given  in  tabular  form,  showing  the  gross  or  total,  the  per  capita,  and 
the  city's  portion,  together  with  the  per  cents  for  each  item.  Full  and  complete 
information  on  all  lines  was  not  obtainable. 


1ST.   APPROXIMATE  VALUE  OF  PBOPEBT¥  DEVOT- 
ED TO  PUBLIC  SERVICE 


(•)  "Publte  SmyW  Property  Uncter  Publie  Ownership 

TABLB  NO.  1 

111   NON-REVENUB  PRODUCING  MUNICIPAL.  PBOPBRTY.    (CITT  AUBI- 

TOR'S  BBPOBT,  1916.) 

 Ptoperly  Valuet  


Per 

Per 

Classification  or  Use  of  Property — 

TotaL 

Capita. 

Cents. 

.11,722,311 

3.44 

&.01 

1,722,086 

3.44 

5.00 

Healiii  and  fianltiitt^ff*  (Sewers,  etc.)  

..  6,255,976 

12.51 

18.20 

Oonuniuiicatioii  Avenues  (Highways,  etc.)   

..  1,842,549 

3.68 

5.36 

Bdncationt  (Library  $459,803,  Schools  $11,540,000) 

..12,000,000 

24.00 

34.93 

.  .10.730,089 

21.40 

31.22 

3,481 

.01 

.02 

90,082 

.18 

.26 

.134,366,574 

68.72 

100 

•Including  Health  Department, 
f Bstimsted  from  School  Andttor^i  Bopoit,  1916. 


TABLE  NO.  2 

111  KOH-BBVSNUB  PBODUCING  COUNTY  PROPERTY.     (COUNTY  AUDI- 
TOR'S BfiPORT,  1915.) 

 -Property  Values  


Entire 

Per 

City 

Per 

Glassiflcation  or  Use  of  Property — 

County. 

Capita. 

Portion. 

Cent. 

$3,015,798 

$4.31 

$2,155,000 

39.32 

63,532 

.09 

45,000 

.88 

253 

•  •  • 

Communication  Am  (Highways,  Bridges). 

.  1,306,838 

1.87 

935,000 

17.04 

.  168,603 

.24 

120,000 

2.20 

.  322,712 

.46 

230,000 

4.21 

.  2,418,038 

3.46 

1,725,000 

81.53 

.  373,591 

.58 

265,000 

4.87 

.$7,669^65 

$10.96 

$5,480,000 

100 

Noti^A  compsriscm  of  t«M»  1^  ^c^^ 
mmm  of  pwweity  d«fiited  to  similar  wm.  See  "PnWic  Safety"  and  GharltleB 

aad  CSotreetioiis.'' 


TABLS  NO.  3 

BIIVBNUE  PRODUCING  MUNICIPAL  PROPERTY  (AUDITOR'S  REPORT,  1915) 

— PnH^erty  Values- 


CSassification  or  Use  of 
Property—  Total 
Water  Department  and  Aqueduct.. $37,849,187 

Slectric  Plant    HH'SSI 

WuboM       natriste^   liM2,260 


Per 
C!apita 

$75.70 
7.47 
3.68 


if^.  $43,423,704  $86.85 


Per 
Gent 

87.16 
8.60 
4.24 

100 


Bemsrks 


Markets  $4,302 


•1?|i©  fun  ▼slu©  of  tiMi  Harbor  property  is  not  given.  It  nndoabtedly  amounts 
to  seveiBl  mlDioii  MlaiB  more  then  ahove. 


TABLB  NO.  4 

MUNICIPAL  PROPERTY  SUBJECT  TO  PRIVATELY  OWNED  PUBLIC  UTfLITY 

USE,  THROUGH  FRANCHISE;  GRANTS 


Classification  or  Use  of  Property—  Total. 

Streets  and  Public  Ways  (Land)  $112,875,000 

Streets  and  Public  Ways  (Pavement  and 

Improvement)  •   25,391,606 

Total.  .$138,266,605 


-Property  Yalues- 


PerCJapita.  Percent. 
$225.75  81.64 


60.78 
$276.53 


18J6 

100 


(b)   Ptibiio  Servioe  Utiiity  Property,  Under  PHvale  Ownership. 

TABLE  NO.  5 


LOCAL  SERVICE  UTILITIBS 


— ^Property  Values- 
Total  or      Per  Per 


City  Portion.  Capita.  Cent 


Service  and  Name  of  Com- 
pany or  Corporation— 

Transportation, 

Los  Angeles  Railway i  $23,500,000  $47.00  16.74 

Pacific  Electric  Railwayi           37,685,000  75.37  26.84 

Telephone,  Two  Ck>mpanies2         14,000,000  28.00  9.97 

Mectric,  So.  Calif.  Edison  C0.2...  19.000,000  38.00  13.53 

Electric,  Pacific  Lt.  &  Pow.  Cor.2  29.000,000  58.00  20.65 
Electric,  ( Los  Angeles  Gas  & 

Gas,        /Electric  Cor.2               14,000,000  28.00  9.97 

Ctes,  Economic  Gas  C0.8.              1,803,000  3.60  1.28 

Gas,  Southern  Counties  Gas  Co.*.   1,439,000  2.88  1.02 


Rftmarlfff 

Includes  City  Railway. 
Total  $56,528,000. 


Total...  $140,427,000  $280.85  100 

Remarks— The  "Property  Values"  are  only  approximate,  and  are  based  on: 
lOutstanding  bonds;  ^actual  valuation  or  estimate;  soutstanding  stocks  and  bonds. 
The  per  capita  amount  for  Pacific  Electric  Railway  was  obtained  by  dividing  the 
total  outstanding  bond  issue  of  $56,528,000  by  750,000,  the  appnudmate  population 
smed. 


TABLE  NO  6 

INTERSTATE  SERVICE  UTIUTIES 

 ^Property  Values  

Per  Per 

Service  and  Name  of  Company  or  Corporation—        TML       Capita.  Gent. 

Telegn^h,  Western  Union  (1)  (2)  1*128,423,727  $  UI8  7M 

Telegraph,  Postal  Tel.  A  Ca^iB  Co.  (1)  (2)                111,380,400       1.11  6J2 

Express,  American  Express  Co.  (1)  (3)                       18,000,000         .84  1.00 

Express,  Wells-Fargo  Express  Co.  (1)  (3)                 23,967,400  1.33 

RaUway,  Los  Angeles  &  Salt  Lake  Ry.  (1)  (4)......   81,824,000)  (  4M 

Rattway,  Atchison,  Topeka  &  Santa  Fe  Ry.  (1)  (4) . .  621,449,276)  207.69  (i4Ji 

Rallirmy,  Southern  Ps/dfic  Co.  (1)  (4)                     804410,416)  (44.81 

Total...,  $1,795,664,218     210.92  100 

Remarks: 

(1)  Total  par  value  of  outstanding  stocks  and  bonds. 

(2)  This  service  covers  nesxly  the  entire  ooontry  and  the  per  capita  amoant 
is  for  the  total  pwilatkm. 

(3)  These  two  express  companies  do  about  fifty  per  cent  of  the  total  business 
of  the  country,  or  in  other  words,  serve  about  half  of  the  population.  On  that 
basis  the  per  capita  share  of  their  value  is  about  $0.84.  The  total  for  Los  Angeles 
is  $420,000. 

C21| 


^^l^^   1*1®      ^^P'^^  ^207.69  is  that  of  the  par  value  of  all  outatRndinc' 

mS^Z^im^h^^Tl       i"^""^!^  "^^^"^  a  »«le  below  paT  Tfte 

wset  value  la  i»robably  not  far  from  $1,758,000,000  for  tbe  three  raUww. 

Tiie  t»tal  liar  value  of  au  witrtMidliig  ntflway  a^ 

Stocks  8,635,835,000 
Bonds  ...  12,133,064,000 

"^^^  ^20,768.899.000 -HlW^^«|2a7.«»«  per  capita  portion. 

LOS  In^elera'tSLVof^^^^^  ^'^^'^^  ^  «ion  gives  for 

Am^     MiS^^n!  ^^.'^^  interstate  railways  reaching  and  servlug  Loa 

iowC  fSS-  t^le  No.  6  may  very  well  be  rewritten  in  the  fol- 


TABLE  NO.  7 

VALOT  OF  lirrCIISTATE  SBSRVIGB  UnUTIBS  PROPERTY  (SUMMARY) 

— ■  Property  Values  


Total  Combined 

Per 

V  aiues  

Credited  to 

Per 

Kind  of  Service— 

ayatena. 

Capita. 

City  of  L.  A. 

Cent. 

Telegraph  (Two  Companies)!.. 

....f  m.804,100 

1  2.40 

1  1,200,000 

1.13 

Bzpress  (Two  Companies) 2 

.84 

420,000 

.39 

Railway  (Three  <:k>mpanie8)3... 

....  1,513,892,700 

207.69 

108,845.000 

98.48 

$210.93 

$105,465,000 

100 

*^  population  of  the  United  States 

3P"  S  f^^SS;i1^2.*5l":iSl?"«'»^"°"  °'       U»»te<i  States. 
^UoS^  -I  «M  nrihnj-  «t  the  U«ftod  State,  divided  by  the 


ssr  .^rasrsTA^     w  ""-""'^'^ 


TABLE  NO.  8 

SUMMARY   OF  PROPERTY  VAI^DBS,  DEVOTED  OR  APPORTinxrirn  rrr. 
PUBUCSERVI(ym  LOS  ANGELES, 

AND  NON-RBVBNUB  FBODUCINO 

 Property  Values—  

Per  Cents  of 


Kind  of  Service  and  Ownership 

Total,  City  or 
CltyPorUon. 

Per 

jrer  t 
Sub- 
Total. 

^nts  01 
Grand 
Total 

Non-Revenue  Produclnfl 

Municipal  Property  

County  Property  

Municipal  Property,  Subject  to  Fraachlae 
Onata  (Streets.  Etc.)  

...  5,480,000 

1  68.73 
10.96 

276.54 

19.29 
3.08 

77.63 

7.36 
1.17 

29.58 

Firat  Snb*TMal  

1856.22 

100 

38.11 

Revenue  Producing 

Municipal  Property   

PHvate  Property,  Local  Service  

Prltala  Pnq^erty,  Interatate  Service  

86.85 

280.85 
210.93 

15.01 
48.53 
36.46 

9.29 
30.04 
22.56 

Second  Sub-Total  

...1289,415.704 

1578.63 

100 

61.89 

Onmd  Total   

..  467,428,883 

834.85 

100 

im 


TABLE  NO.  9 


SUMMARY  OF  PROPERTY  VALUES,  DEVOTED  OR  APPORTIONED  TO  PUB- 
MC  SERVICE  IN  Um  ANGELES.  GROUPED  UNDER  PUBLIC 

AND  PRIVATE  OWNERSHIP 

 -Property  Values  

Per  Cent  of 


1 

Kind  of  Ownersnip  ana  oervico— 

rotal,  City  or 

CAfv  Portion 

Per 
Canita. 

Sub- 
TotaL 

Grand 
Total. 

riiDiiciy  uwned  rropercy 

.$  34,366,574 
5,480,000 
,  43,423,704 

$  68.73 
10.96 
86.85 

41.27 
6.58 
58^5 

7.35 
1JL7 

First  Sub-Total.  

.$  83,270.278 

$166.54 

100 
87J»9 

17.81 

Non-Revenue  Producing,  City,  Subject  to  Pri 
vately  Owned  Utility  Use,  Through  Fran- 

.  138.266,605 

276.53 

62.41 

29.58 

Second  Sub-Total  

.1221,536.883 

1443.07 

100 

47.40 

Privately  Owned  Property 

Revenue  Producing,  Utility,  Interstate  

140,427,000 
.  105,465,000 

280.85 
210.93 

57.11 
42.89 

30.04 
22.56 

,  $245,892,000 

1491.78 

100 

52.60 

.  467.428,883 

1984.86 

100 

An  inspection  of  Table  No.  9  shows  that  the  total  city  owned  prop^  an* 
the  city's  share  of  the  county  owned  (omitting  "Streets  and  Ways,'  subject  to 
franchise  grants),  devoted  to  public  service,  amounts  to  $83,270,278.  Of  thiB 
amount  a  Uttie  over  one-half  or  $43,423,704  is  devoted  to  so-called  revenue  pro- 
ducing service.  The  greater  portion  of  this,  $37,849,187  or  87%  la  for  water  smrvloe. 

The  balance  of  the  property  credited  to  the  city  for  utility  service  la  under 
private  ownership  and  amounts  to  $245,892,000. 

Table  No.  5  shows  the  total  Pacific  Electric  RaUway  bond  Issue  to  be  $56,- 
528,000.  or  $18,843,000  more  than  credited  to  "City  Service." 

Table  No  7  shows  the  total  value  of  outstanding  securities  of  concerns  ren- 
dering service  to  Los  Angeles  as  $1,793,664,200,  or  $1,690,199,200  more  thanjredited 
to  "City  Service  "  Together  these  "Outside  Service"  items  amount  to  $1.709.04Z.ZW 
which  was  not  included  in  the  city  service  of  the  tables.  This  added  to  ^  amount 
Mated  for  "City  Service"  gives  a  total  of  $1,954,943,200,  of  private  property  owner- 
ablp,  "Interested"  in  the  elty  pubUc  utUity  sotvIco. 

Table  No.  4  shows  the  land  value  of  "Streets  and  Public  Ways"  as  $112  875  000 
and  the  value  of  "Street  Paving.  Etc."  at  $25,391,605,  or  a  total  of  $138,266,605. 
The  property  represented  by  this  value  is  all  subject  to  franchise  rights  for  carry- 
ing on  the  city  public  utility  service,  under  private  ownership. 

The  value  of  public  property  subject  to  private  ownership  franchise  rlghta 
added  to  the  value  of  privately  owned  utility  service  property,  gives  a  total  of 
tS  093.200.805  values,  subject  to  private  ownership  influence,  back  of  City  Service. 

In  addition  it  should  be  noted  that  the  $25,391,605.  given  as  the  value  of  Pav- 
Ine  "  has  been  "Created"  under  private  contract.  The  major  portion  ol  the  Item 
of  $6  255.976  for  "Health  and  Sanitation."  as  weU  asi  $12,000,000  of  school  property 
and  ither  Items  of  Importance,  are  the  creation  of  private  contracts,  or  subject  to 
real  estate  jobbing  Infflnences.  The  total  of  these  items  amounts  to  $43,647,581. 

In  1915  the  Harbor  Department  had  work  done  under  private  contract  amount- 
Ine  to  $867,808,  with  an  addition  of  $68,896  spent  on  street  contract  work. 

Without  farther  comment  on  property  values  at  this  fflne  we  wlU  now  give 
fsonalderatton  to  the  annual  cost  of  different  kinda  of  public  service  rendered  toy 
pubUo  and  private  ownership  undertakings. 


MB.   APPROXIMATE  TOTAL,  PEE  CAPITA  AND 
COMPARATIVE,  ANNUAL  COST  OF 
PUBLIC  SEBVICE 


W   Untftr  PuMlo  OniiMffililii. 

TABLE  NO.  10 

m  AMNUAL  C30ST  OP  WN-RB^mWUB  PRODUCINO  CITY  SERVICE.  (FROM 

V.  a  0BNSU8  BSPOBT,  1916) 

Cost  of  Service—- 

Kind  of  Service  Rendered.-                                 cSSia.      TotaL  oSt. 

▲veniies  of  Commmiication  (Hf^wa9«) .......             i  16      2  080^90  i  HI 

Edn.^^                                                                           2^;290  16.78 

SJ555i«  .                                                                           856.394  2.g7 

mntm  'a^  mittit^^                                        ^       l^l'^ll  3  00 

•••  ...124.79  |12^9M<NS  100 

^Mmmat  for  fdMNds  estbiitM  Draoi  Sdiom  Oistiiet  Report 


TABLE  NO  11 

II)   NON-BEVENUE   PRODUCING   COUNTY  SBEVIGBL 
CAinHTOR'S  BBPORT.  1915) 


-Cost  of 

Service — 

County 

Per 

City 

Per 

Kind  of  Service  Rendered 

TOUO. 

Capita. 

Portion. 

Cent 

General  County  CtoVttnniiiit  

12.31 

11,155,000 

18.36 

Public  Safety   

...  381,825 

.55 

276,000 

4.84 

Conservation  of  Health  

7,022 

.01 

5,000 

.08 

Avomea  of  Cc»iimanication  (Hii^ways)... 

...  2,242,759 

3.20 

1,602,000 

25.51 

.17 

85,000 

1.36 

Charities  

1.70 

850,000 

13.56 

Miscellaneous   

...  621,856 

.89 

446,000 

7.07 

Mterest  and  Debt  Redemption  

...  1,096,773 

1.57 

785,000 

12.48 

FliiyiiMts  for  Objects  of  Trust  

.52 

260,000 

4.17 

iKtiatMitt  PartiiaM    

1.64 

820,000 

13.07 

16,282,000 

100 

TABLE  NO.  12 

IS)  MMmSMs  COST  OF  RilVJONUE  PRO0UGO9CI  UTILITY  SERVICE.  CITY 

—Cost  of  Service  

Kind  of  Service-  TotaL  <SSt 

Water,  fServicei  11  748  000   |3  49  7 

^^^^^^^t^'^^}^''''""  ^'^^'^^  ^-^i  *7.13  $3,568,000  82.68 
iiieetiie»  imMl  aiid  Redemption   m        ra      qiq  finn    7  in 

gi^,  fSenrlet   60,861  421 

Uriior.  llBtwiat  aai  Rademptloii>. .    SfS^OOO     .78  J      .86      428,861  9.92 

Remarks^'''*' ^  ^^^^  ^ 

•Sr^liS^  CaBUitolon.  1916. 

[24] 


While  tho  amount  shown  for  water  service  is  less  than  estimated  in  Uie 
previous  report  the  estimated  amount  would  be  practically  made  up  by  the  amoit&t 
of  service  rendered  by  the  private  water  companies. 

See  Table  No.  13  and  Remark  (1).  Table  No.  19. 

(ii)   lltiiiar  Privata  Ownerahlp. 

TABLE  NO.  13 

(I)  ANNUAL  COST  OF  LOCAL  UTILITY  SERVICB 


-Annual  Cost  of  S«rvice- 


Per  Total  for      Per  Per 

Kind  of  Service—                                Capita.  City  of  L.  A.  Ftoiily.*  Cent 

Transportaaon,  Local  Street  Railway......... $16.20  $8,100,000  $81.00  32.30 

Telephone,  Local                                           13.04  6,518,964  65.19  25.99 

Electric,  Light  and  Power                                12.52  6,258,000  62.58  24.95 

Gas:  Light  Heat  and  Power                             8.21  4,106,508  41.06  16.38 

Water  (About  18,460  Consumers  @  $7.08)i  19  96.318  (86.40)  M 

Total  $50.16   $25,078,782  100 

•A  family  null  Is  considered  as  made  up  of  five  persons. 
Remarks: 

iThe  per  capita  amount  of  $0.19  is  based  on  the  entire  city  population.  The 
amount  per  capita  for  those  actually  served  by  the  private  water  companies  is 
17.08  or  $35.40  per  fS^y.  These  consumers  also  pay  Interest  and  sinldng  fond 
taxes  on  the  aqueduct  bonds,  amounting  to  $3.64  per  capita  or  $18.20  per  family. 
9ates  and  taxes  togetHer  give  $10.72  per  capita  and.  $68.60  per  family. 


TABLE  NO.  14 

(2)   ANIMAL  COST  01*  INTBRBTATE  UTILITY  SERVICE 

 ^Annual  Cost  of  Service  

Total  for  the      Per   City  of  L.  A  Per 

Kind  of  Service—                            United  States.  Capita.    Portion.  Cent. 

Ttaiaportation,  Railwayi  $8,500,000,000   $35.00   $17,500,000  91.96 

Transportation,  Express2                           206,108,092      2.06      1,030,540  5.41 

Telegraph  and  Long  Dist  Telephones ....     100,000,000      1.00        500,000  2.63 


Total  $8,806A08,092  $88.06  119,080,640  100 

Remarks: 

lUnited  States  total  estimated  firom  1914  report. 

sUnited  States  total  estimated  as  twice  the  combined  charges  for  traniporta- 
tion,  of  the  American  and  Wells -Fargo  Express  Companies. 

scomplete  or  exact  data  not  available.  Estimate  probably  too  small. 


(C)  PUBLIC  WORK  CARRIED  OUT  UNDER  PRIVATE  CONTRACT  DURING  1915 

TABLE  NO.  15 

 Ckist  of  Improvement- 


Separate 

Kind  or  Class  of  Improvement—  Items. 

Street  Improvement, 

Vrooman  Act  $4,216,867 

Bbunmon  Act   187,834 

Harbor  Fund   68,896 

School  Buildings,  Equipment.  Etc. 

BuUdings    1,150,571 

Equipment  •  •  216,668 

Barbor  Improvements*  


Per 
Capita. 


Total. 


.......... 


2.73 
1.78 


1,366,224 
867,808 


Per 
Cent 


$8.94     $4,473,597  66.69 


20.87 
12.94 


Total   ^3.41     $6,707,629  100 

Remarks: 

•In  addition  to  llila  amonnt  $68,896  was  Included  under  "Street  Improve- 
mmits/'  making  a  total  of  $986,704  Ifor  Harbor  Contract  Work. 

[26] 


TABLE  NO.  16 

SUMMARY  OF  ANNUAL  COSTS  FOR  PUBLIC  SERVICE,  GROUPED  UNDER 

NON-BBVENUS  AND  REVENUE  PRODUCING 

 Annual  CJoit  of  Service  

Per  Cents  of 


Class  of  Service 

Total  Service 

Per 

City 

Sub- 

Grand 

Rendered  by — 

by  Groups. 

Capita,. 

Portion. 

TotaL  TotaL 

Non- Revenue  Producing 

.$  12,876,223 

$24.79 

$12,395,466 

48.15 

16.37 

8,791,446 

12.56 

6,282,000 

24.40 

8.29 

17,998,543 

6.32 

3,160,000 

12.28 

4^7 

.  780^,4S5 

7.81 

3,906,000 

16.17 

6.16 

Fif«t  Sub-Total. 

.$  820,469,647 

$51.48 

125,742.466 

100 

33.99 

Roventio  Produeiiig 

4,315,661 

8.62 

4,315,661 

8.63 

5.70 

United  States  Postal  Service... 

.  313,364,667 

3.13 

1,565,000 

3.13 

2.06 

Privately  Owned,  Local  Service. 

25,078,782 

50.16 

25,078,782 

50.17 

33.12 

Privately  Owned,  Interstate  ... 

.  3,806,108,092 

38.06 

19,030,540 

38.07 

25.13 

Second  Snb-Tolal.  $4,148,867,202 

$99.97 

$49,989,983 

100 

66.01 

151.45 

75,732f449 

100 

!|i> 

TABLE  NO.  17 


SUMMARY  OF  ANNUAL  COSTS  FOR  PUBLIC  SERVICE,  UNBRR  PUBLIC 

AMD  PRIVATB  OWNERSHIP  OROUPINO 

Annual  Coat  of  Service  

Per  Cents  of 

Kind  of  Ownership;  Total  Service    Per         City  Sub-  Grand 

Service  Rendered  by —  of  Group.    Capita.     Portion.      Total.  Total. 

Publicly  Owned 

cm  and  S^tihool  Difltrlel  f    17491,S84  $33.42  $16,711,127  52.84  22.07 

County                                             8,791,446  12.56  6,282,000  19.86  8.29 

State                                               17,998,543  6.32  3,160,000  10.00  4.17 

United  States                              1,094,168,102  10.94  6,470,000  17.30  7.22 

11nilSali.MaI..«Ut8A4»,976  |«SJi  181^23427.    100  41.75 


fNrlnalrty  Oufwad 

Local,  UtiUty  Sendee                      25,078,782  50.16  25,078,782  56.85  33.12 

mtnralliit  Umty  Senrleo. . . . . .  3308,108,092  88.06  19.030,540  43.15  25.13 

Saomid  Sal>.ToU1.83^1A86374  |88J22  |44409,322  100  68Jt5 

Omnd  Total                  iJMjmjM  ISLm  76.782»448  100 


In  addition  to  the  above,  a  substantial  amount  should  be  included  to  cover 
coat  of  water  transportation,  local  cartage,  warehouse  and  stora^^e  charges,  etc. 
nsntea  for  thaae  ttema  are,  howtiww,  not  available. 

There  are  some  duplications  In  the  tahulated^figures,  as  the  amonnt  for  "Inter- 
state Railway"  service  includes  part  of  the  cost  shown  for  postal  and  express 
charges.  In  like  manner,  the  cost  of  other  service  is  made  up  in  part  of  trans- 
portation charges.  The  amount  of  duplication  and  overlapping  is  probably  much 
lota  in  tlie  asgragato  than  tlioaa  aarrlce  eoata  wbicii  can  not  be  aliown. 

While  the  tabulation  figures  are  not  fully  exact  and  conq^eta  or  np  to  dal% 
tlMr  wm  nawertlMlaaa  aarvn  for  tlia  purposea  of  comparison. 

£26] 


DIraol  Tax  Levy 

TABLE  NO.  18 
CITY  AND  COUNTY  DIRECT  TAX  IMVY,  1915 


 ^Amount  of  Direct 

Tax  

'  Total 

Per 

City's 

Per 

Per 

'Iioyy  for*— 

Collected. 

Capita. 

Portion. 

Family. 

Cent 

 16,753,715 

$13.51 

16,753,715 

$67.55 

60.50 

8.82 

4,410,000 

44.10 

39.50 

$^...33 

$11,163,715 

$111.65 

100 

^General  property  tax. 


It  is  perhaps  needless  to  further  consider  tabulation  detail  at  this  tinio,  and 
we  come  to  the  real  lesson  to  be  brousht  out  and  presented  througli  the  study. 


3RD.    INCENTIVES  FOR  POLITICAL  ACTIVITY  OF 
UTILITY  AND  CONTRACTING  CONCERNS;  NEED 
FOR  EXTENSION  OP  PUBLIC  OWNERSHIP 
AND    CONDUCT    OF  PUBLIC 
SERVICE  UNDERTAKINGS 

8oma  Cauaea  for  the  Breaicdown  of  Our  Municipal  Governments 

The  showing  made  in  the  United  States,  by  municipal  goyemments,  during 
the  century  and  a  quarter  of  our  independence,  has  on  the  whole  been  quite  dis- 
annrtnting.  Inefficiency  and  graft,  with  the  domination  of  the  political  "boss," 
have  been  the  rule  rather  than  the  exception,  to  a  greater  or  less  degree  in  prac- 
tically all  of  our  cities.  Among  the  causes  or  influences  contributing  to  this  result 
may  be  mentioned: 

1st  Forms  of  government  poorly  adopted  for  city  conditions  and  service, 
(divided  responsibiUty,  checks  and  balances,  short  terms  of  office,  etc.) ; 

Stod.  Nomination  and  election  of  city  officials  based  on  the  lines  and  policiea 
of  national  party  politics; 

8rd.  Acceptance  and  use  by  the  municipalities  of  the  "spoUa  system."  which 
was  grafted  on  the  practice  of  our  national  parties; 

4th  The  enormous  growth  and  extension  of  public  utility  enterprises  end 
undertakings,  and,  the  granting  and  trading  in  utility  franchises,  with  the  at- 
tendent  corruption  and  bribery; 

Bth.   The  practice  of  letting  public  works  contracts  to  private  parties; 

6th  Indifference  and  lack  of  interest  in  public  affairs  by  the  elector^  and 
an  absence  of  open-mindedness  to  discover  and  adopt  the  best  fonns  or  methoda 
JJgOT«nment  suited  to  municipal  requirements,  already  proven  good  by  others. 

In  few  words,  our  municipalities  have  been  administered  too  much  the 
interests  of  personal  or  private  profit,  rather  than  In  disinterested  patriotlo 
service  for  tho  good  of  all. 

Franchises  and  Contraeta 

This  part  of  the  report  will  attempt  to  deal  only  with  privately  owned  puWte 
utilitv  franchise  and  public  works  contract  questions.  These  have  been  and  are 
Snw  unouestio^^^^^    among  tiie  most  potent  flMStors  In  the  production  of  corrupt 

to  o^^  There  has  been  rarely  a 

SSiiL'^^^y  ^         "^-^  ^ 

[271 


liad  back  of  and  inyolved  with  tt,  in  a  mm  «r  Um  diieel  WW,  traacbise  srants 
or  public  works  contracts. 

tVe  notorious  TmrnnuoKf  Hall  interests  in  New  York  City,  have  been  chiefly 
eoncemed  with  puhUo  works  contracts,  but  trading  In  ntlUty  franchises  haa  bem 
no  inconsiderable  part  of  their  interest  and  activity  in  the  nranicipality's  affairs. 

Lincoln  Steffens  in  "The  Shame  of  the  Cities"  gives  some  outstanding  featovea 
of  graft  and  corruption  of  various  kinds  in  the  different  American  cities. 

As  moat  notaUe  case  in  this  country,  of  the  exposure  and  prosecution  of 
gmfl  and  mruption,  was  that  of  San  Frandaoo.  Tears  of  abeolnte  dominati<m 
and  corruption  in  the  State  of  California,,  by  a  powerful  political  machine  for 
profit,  backed  by  the  Southern  Pacific  and  other  utility  interests,  reached  a  cul- 
mination in  1906,  directly  after  the  San  Francisco  earthquake  and  fire,  in  franchise 
trading  and  Inribery,  together  with  extortion.  As  a  result,  the  mayor  was  ccm- 
Tieted  and  sentenced  for  extortion;  sixteen  of  the  eighteen  supervisors  were  forced 
to  resign  for  confessed  bribe  taking;  the  then  San  Francisco  "boss,"  Abe  Rnef, 
was  sent  to  the  penitentiary.  (Every  citizen  of  the  country  should  read  and  re- 
read "'The  System'  as  Uncovered  by  the  San  Francisco  Graft  Prosecution,"  by 
Flranklin  Hidilioni). 

The  national  gomsmuMt  liaa  not  baan  free  from  exploitaUon,  as  witness  the 
railway  ]and*iiant  franda,  wm4  «ka  amor  plato  contract  scandals  of  some  years 

Mon^  Meaaure  of  Control  Influence 

The  tabulations  giving  the  value  of  property  and  the  annual  cost  of  public 
utility  senlce,  wm  aenre  to  ahow  In  a  measare  the  source  and  the  degree  of 
influemea  and  preaanra  of  tlia  Invisible  GovanuDMnt"  or  "System**  on  oar  pnbUe 
affairs. 

Table  No.  9  shows  that  out  of  the  total  of  $934.85  per  capita  value  of  property 
devoted  to  public  service,  $491.78  or  52.6%  is  privately  owned.  In  addition  $276.53 
or  t9.f %  of  the  balanee  la  aabjeet  to  ftandilse  grant  for  carrying  on  private 
owned  public  utility  service.  TlMae  give  a  combined  total  of  $768.31  per  caidta 
or  82.2%  of  the  total  public  service  rendering  property  subject  to  private  owner- 
ship, influence  and  control.  Again,  of  this  amount,  the'  street  paving  represents 
150.78  per  capita  or  5.43%  that  is  created  under  private  contract.  Other  "Contract 
Gfeated"  pioiwty  brings  tbla  total  np  to  18719  p«r  capita  or  9.34%  contract  in- 
iaence.  This  added  to  the  above  82.2%  givea  a  total  of  91.54%  as  the  private  bi* 
tatiOBt  influence,  in  owning,  controlling  or  creating  public  service  property. 

Table  No.  15  shows  that  for  1915,  in  the  city  and  school  district^  over  $€,700,000 
was  expended  under  private  contract. 

Table  No.  17  shows  that  oat  of  a  total  of  ItlM  declare  per  capita  tor  pnbUe 
aarvice,  $88.22  or  58.25%  is  furnished  by  privately  owned  utility  concerns. 

The  per  capita  amount  of  value  of  $491.78  represents  a  total  investment  for 
the  city  service  of  $245,890,000.  It  is  needless  to  say  that  this  investment  is  made 
iii  maintained  primarily  for  profit.  Public' works  contracts  are  also  undertaken 
lor  galaing  praSt 


Incentlvea  for  Political  Activity,  by  Utility  ConcanfMiand  Contractora 

In  establishing  their  franchise  rights,  equipment,  and  in  rendering  service, 
the  public  utility  concerns  have  continually  to  go  to  the  city  government  to  get 
rights  and  privileges.  In  securing  contracts  and  carrying  them  into  execution,  the 
contractor  baa  alao  to  deal  wttb  the  city  offldals.  Rights,  privileges  and  accom- 
modatloBs  can  usually  best  be  secured  by  having  at  least  part  of  the  governing 
authorities  friendly  to  those  who  seek  grants  and  privileges.  This  naturally  puts 
these  "Private"  interests  in  politics  to  secure  the  election  and  appointment  of 
officials  who  are  "friendly."  The  intermediary  to  accomplish  this  purpose  has 
genmrally  been  tbe  poiHIeal  ^boaa;"  Tbere  are  other  aaccessfnl  agencies  employed 
wbicb  we  will  not  undertake  to  discuss  at  this  time. 

The  prizes  and  returns  to  be  secured  by  the  exploiter  are  so  great  that  few 
if  any  American  cities  have  escaped  this  blighting  influence  on  their  government. 
The  situation  is,  and  has  been  such,  that  some  utility  concerns  that  would  have 
otberwiaa  raflralned  tnm  dtebonaat  and  cornipt  polltica  and  practices,  have  been 
forced  into  the  political  Held  to  aaif  datbaaa^  aiBtaat  tba  naacrapoloiia  meiboda  of 
flMdr  '0OHipatltorB  and  ^pyoiaBtik 


It  will  be  to  little  purpose  to  detail  further  at  this  time  the  pemldons  influ- 
ence on  government  exerted  throu^  the  political  activity  of  public  works  con* 
tractors,  and  public  service  utility  concerns.  The  most  casual  observer  recognizes 
the  unsatisfactory,  and  in  many  cases  Intolerable,  governing  of  American  cities. 
The  source  and  origin  of  the  "Invisible  Government"  or  "System,"  and  its  constant 
and  subtle  influence  is  not  recognized  or  appreicated  to  the  extent  that  it  should 
be,  by  the  great  majority  of  our  citizens.  Dishonest  and  inefficient  municipal  gov- 
ernment is  of  such  long  standing  and  so  extensive,  that  well  qualified  self-respect- 
ing citizens  can  hardly  undertake  municipal  service,  without  feeling  that  in  so 
doing,  it  is  to  a  degree  at  a  sacrifice  to  their  self-respect.  In  fact  there  more 
than  a  suspicion  that  the  "Invisible  QowmmeinV*  agencies  have  acted  with  a  delib- 
mte  purpose  to  have  public  office  carry  a  degree  of  odium  and  stigma,  to  dis- 
courage well -qualified,  honest  and  self-respecting  men  from  accepting,  let  alone 
seeking  this  service. 

We  are  not  lacking  in  exposures  of  the  prostitution  of  government  to  serve 
selfish  interests.  We  have  many  apieals  to  our  elvio  pride  to  rid  ourselves  of  the 
domination  of  these  interests  in  politics  and  government  Many  appeals,  and  more 
or  less  effort  has  been  directed  toward  the  extensicm  of  public  ownership  of  service 
utility  undertakings,  as  an  aid  in  securing  relief. 

Notwithstanding  all  this,  our  progress  in  improving  and  securing  the  desired 
degree  of  honesty  and  efficiency  in  government,  is  diacouragini^y  slow. 

Doilara  and  Centa  Reaaona  for  Extending  Government  Ownerahip 

Self-interest  is  one  of  the  strongest  and  most  potent  iioantives  for  action, 
which  seldom  fails  to  meet  with  a  fair  degree  of  response,  but  seems  never  to 
bave  been  adequately  presented  as  an  argument,  in  the  interests  of  all,  for  the 
extension  of  public  ownership.  What  will  the  extension  of  government  ownership 
of  public  service  utilities  mean  to  us  individually  in  the  full  measure  of  dollars 
and  cents? 

A  further  study  the  tabulations  will  disclose  some  of  the  moat  convincing 
dollars  and  cents  reasons  why  we  should  ezt^d  government  ownership  to  toclude 
all  public  service  utility  enterprises. 

Table  No.  9  shows  the  per  capita  investment  in  utility  enterprises  under 
private  ownership  to  be  $491.78.  Before  the  day  of  regulation  and  rate  flxing 
authorities,  rates  were  generally  made  asi  high  as  the  traffic  would  bear.  M 
preset  a  return  of  eight  per  cent  on  the  investment  is  considered  fair.  Munici- 
palities can  generally  borrow  money  for  from  four  to  five  per  cent.  If  all  of  the 
public  utility  service  were  carried  on  as  public  enterprises,  without  profit,  and 
money  borrowed  at  four  and  one-half  per  cent,  then  the  annual  saving  from  this 
Item  alone  would  amount  to  tbe  potential  dilference  between  that  and  eight  per 
cent,  into  $491.78  or  $17.21  per  capita. 

Table  No.  15  shows  that  in  1915,  $13.41  per  capita  was  spent  for  contract 
work.  Contractor's  profits  are  generally  figured  at  twenty  per  cent.  If  this  work 
were  carried  out  by  the  municipality  at  cost,  this  per  cent  of  cost  amounting  to 
^.08  per  capita,  could  generally  be  saved. 

The  two  items  above  amount  to  a  total  of  $19.89  per  capita  per  annum,  or  a 
gross  amount  of  $9,945,000  for  the  entire  city. 

Table  No.  17  shows  the  cost  of  utility  service  per  capita  rendered  by  private 
concerns  to  be  $88.22.  The  potential  saving  on  this  of  $17.21  leaves  $71.01  or 
a  reduction  of  19.49%.  This  total  potential  reduction  in  the  cost  of  utility  serv- 
ice for  the  whole  Ci^  of  Los  Angeles  amounts  to  $8,605,000  per  annum 

The  $8,605,000  annual  saving  represented  by  the  3%%  difference  between 
'•Return"  and  "Interest,"  is  not  the  only  money  saving  that  may  be  reasonably 
expected.  There  is  now  an  enormous  amount  of  duplicati<m  and  over -lapping 
which  could  be  eliminated.  With  parcela  post  service,  is  tbere  any  good  reason 
why  the  country  should  be  served  in  addition  with  half  a  dozen  or  more  inde- 
pendent, privately  owned  express  companies?  Under  government  ownership  and 
operation  there  is  no  good  reason  why  the  telephone  and  telegn^h  service  should 
not  be  combined  with  and  made  a  part  of  the  postal  system. 

In  interstate  railway  transportation  a  great  amount  of  duplication  of  prop- 
erty and  service  could  be  avoided  without  any  loss  in  efficiency,  and  probably 
with  an  actual  gain. 

It  is  hardly  necessary  to  mention  the  two  local  telephone  systems,  the  two 
local  transportation  systems,  the  two  telegraph  systems,  the  three  electric  sys- 
tems, the  three  or  more  gas  companies,  and  about  ten  private  water  companlea. 


It  !■  a  fiiir  presiimptioii  that  under  complete  gOTenunenl  ointeriliip  tU 
piMiii  flerftee  iitilltlet»  tbat  throash  the  ftduction  of  over-hmA  expense  and 
mmSkm:  ispilcation  oi  property  and  servlee  an  additional  saying  of  about  10% 
oouli  !»•  lad  on  Uia  $44409,322  annual  utility  serrlce  cost,  conducted  under  private 
mmtmibSB,  amounting  to  |4»410^32.  This  combined  with  the  saying  of  18,605,000 
on  T9!tt  Bfltnm"  glTca  a  total  of  113,015,932,  or  $26.03  per  capita.  In  addition 
Iho  saving  of  per  capita,  or  a  total  of  |1«M0,000»  the  posalhlo  saving  on 
oontracta,  la  thrown  In  for  good  moaaure. 

It  win  ho  of  Interoat  to  ahow  In  tabular  form  the  cost  of  all  kinds  of  senr- 
loe^  midor  par  capita,  per  fodly,  and  te  comparatlTe  per  cents.  See  Tahle  No.  19. 

Many  conplalnta  are  hoard  aboot  high  taxes.  Just  how  much  of  the  public 
■errloo  Is  paid  from:  direct  tax  lory;  fees  and  licenses;  Internal  revenue;  duties; 
iuea;  ratoa,  etc^  would  be  Interesting  to  show.  This  Inforflitlon  Is  apparmliy 
not  available,  wfthout  a  great  deal  of  research.  If  at  all. 

TUble  No.  16  shows  the  total  annual  cost  of  public  service  for  the  citizens  of 
Los  Angeles  to  be  175,732,449.  Of  this  amount  $25,742,466  or  $33.99%  is  the  cost 
of  non-revenue  producing  service,  rendered  by  the  City,  County,  State  and  United 
States. 

TtM  Six  1  argsat  Itama  of  Public  ftervioe  Coats 

From  Table  No.  18  note  that  the  total  direct  tax  levy  amounts  to  $22.33  per 
capita.  Table  No.  19  shows  that  the  largest  single  item  of  expense  enumerated 
lor  public  service  is  $35.00  per  capita  for  interstate  railway  transportation.  The 
smallest  is  for  county  public  health,  $0.01.  Total  for  city  and  county  public 
health  $1.58.  The  second  largest  item  is  for  local  transportation,  $16.20.  The 
third,  local  telephone  service  $13.04.  The  fourth,  electric  service  $12.52.  Edu- 
cation comes  fifth,  at  $9.65.  The  sixth,  is  gas  at  $8.21.  Note  the  fact  that  these 
six  largest  items  of  expense,  except  the  fifth  for  education,  are  of  the  revenue 
producing  daaa  and  are 'for  privately  owned  public  utility  service. 

Direot  Tax  and  "SavinfP  Cwn|Mired 

'Tkble  No.  IS  ahows  Hm  total  dtroet  tax  levy  Of  the  dty  and  county  amounts 
to  |1M<3,716.  It  la  eqplvaiattt  to  4MM  por  cost  of  the  cost  of  non  -revCTue  pro- 
ducing sorvtoe.  Of  the  total  public  Mfvloe  cost  ctf  176,782,449  per  annum  It  amounts 
to  14.74%.  Of  the  cost  of  aervice  rciidirad  under  public  ownen^lp,  of  |81,mA27, 
Hm  direct  tax  levy  as  above  represents  86  JO  per  cent. 

Compare  now  the  potential  saving  on,  "Fair  Return"  of  $8,605,000,  "Overhead, 
Etc."  $4,410,932;  total  $13,015,932  per  annum,  with  the  cost  of  different  kinds  of 
public  service,  under  public  and  private  ownership,  and  the  direct  tax  levy. 

Deaeription  of  Figure  1 

Figure  1  shows  the  "Grand  Total"  per  cents  f mr  the  different  items  of  Table 

No.  19  dracwn  to  scale.  The  aoUd  black  bars  represent  to  scale  the  figures  set 

opposite.  The  first  bar  column  represents  kind  of  ownorahlp;  tlie  second,  repro- 

aents  kind  of  service;  the  third,  repfeaenta  the  detail  of  the  kind  of  service;  the 

fourth,  repreaenta  revenue  and  non-revenue  service;  the  fifth,  source  of  revenue 

or  how  the  service  ooat  is  paid;  and  sixth,  the  total  per  capita  cost  per  annum. 

The  per  cent  that  eadi  Item  la  of  the  whole  Is  given  In  figures  In  each  case  and 

Where  practicable  the  per  capita  coat  In  dollars  and  cents  as  well.  The  division 

line  between  private  and  public  ownership  extends  across  bars  1,  2  and  3,  while 

that  between  revenue  and  non-revenue  producing  extmids  across  bars  3, 2  and  5. 

180] 


TABLE  NO.  19 


APPROXIMATE  ANNUAL  COST  FOR  DIFFERENT  KINDS  OF  PUBLIC  SERV- 
ICE. PER  CAPITA,  PER  FAMILY,  AND  IN  COMPARATIVE  PER  CENTS 

N.„-R.v.„u,  Producn.-                     ^,  -Annul  Cost  of  Service- 

Kind  of  Service,  Rendered  by        Service  Per       Per      Sub  Grand 

Paid  by.  Capita.  Family.Totl  %.  Tot'l  % 

dty— General  City  Government  1-2-8-  |  3.00   I  15.00     12.10  1.98 

Public  Safety     3.77      18.85     15.19  2.4» 

Public  Health   1.57        7.85      6.32  1.03 

Highways   4.16      20.80     16.78  2.76 

Education   9.65      48.25     38.92  6.37 

Recreation    .71       3  55      2.87  .47 

Charities   1-19       ^.95      4.82  .79 

General  and  Miscellaneous. ......  .74       3.70      3.00  .49 

Total  City  -1-2-3-  24.79     123.95      100  16.37 

•48.15 

Oounty — €teneral  Government  i-a-3-  2.31      11.55     18.36  1.53 

Public  Safety   .55       2.75      4.34  M 

Public  Health   .01         .05        .08  .01 

Highways   3.20      16.00     25.61  2.12 

Recreation   .17         .86      1J6  .11 

Charities   1-70       8.50     13.56  1.12 

Miscellaneous   .89        4.45      7.07  .59 

Interest  and  Debt  Redem   1.67        7.85     12.48  1.04 

Objects  of  Trust   .52       2.60      4.17  .84 

Investments  Purchased   1.64       MM    18.07  1.08 

Total  for  County  1-2-3-  12.56      62.80     100  8.29 

♦24.40 

State  Total  1-2-3-  6.32      81.60   •12.28  4.17 

United  States— Total  i_2-3-7-8-  7.81      89.05   •15.17  6.16 

Total — ^Non-Revenue  Producing . .  .1-2-8-7-8-  61.48    257.40     100  38.9® 


Revenue  Producing — 

City— Water,  Service  4- 

Int  &  Redemption   1- 

Electrlc,  Int.  &  Redemption  1- 

Hiirlior,  Service   .3-6- 

iut.  ft  Redemption  1- 

Total  City  1-3-4-5- 

Unlted  States— Postal  Swvlce  .4-7-8- 

Total— Public  Ownership  1-8-4-5-7-8 

Private  Ownership  

Transportation,  Street  Ry.  6-6- 

Transportation,  Interstate  4  6  6- 

Transportation,  Express  4- 

Communlcatlon,  Telephone  ....... 4- 

Conununlcatlon,  Telgr.  &  L.  Dte.Tel.4- 

Light  A  Power,  Electric  4- 

Light  &  Power,  Gas  4- 

§  Water   4- 

Total — Private  Ownership  ....4-6-0- 

Total— Revenue  Producing   1-3-4-5-6- 

QRAND  TOTAIr-Non-Rev.  &  Revenue 

tSl] 


3.49 

17.46 

40.50 

2.31 

ZM 

18J0 

42.18 

2.40 

.64 

8J0 

7.40 

.4S 

.12 

-  .60 

1.40 

.08 

.73 

3.65 

8.52 

.49 

8.62 

48.10 

100 

6.70 

t73J6 

3.13 

16.65 

t26.64 

2.oe 

-  11.76 

58.75 

•  100 

7.76 

tll.76 

16.20 

81.00 

18.36 

10.70 

35.00 

175.00 

39.67 

23.11 

2.06 

10.30 

2.34 

1.36 

13.04 

66  JO 

14.78 

8.61 

1.00 

5.00 

1.13 

M 

12.56 

62.58 

14.19 

8.26 

8.21 

41.06 

9.81 

5.42 

.19 

.96 

.22 

.12 

88J8 

441.09 

100 

68J4 

t88.25 

99.97 

499.84 

100 

66.01 

$16145 

I767J6 

100 

c/rx  semtci 

A  XHOOLS 

J 6^7% 


I 

i 


1*1 


G/y'A.  GOV.   /J9S  % 


AOS  % 


6.37%  ^B.6s 


rCTAL 


S./6  % 
1^  7.3/ 

ciry  sgmc 
s.7or0 


TRANPOR^ 
TATiCM 


LOCAL  Stff£ET 

ffA/LWAY 
/0. 70  % 


iNT£R^TAT£ 
ffAiLWAY 


COtfrfUMCA- 
T/OA/  S£mf^ 


LOCAL  TELEPHO/fE. 


PtST  TELEmONC 

a  0AOO 


U6HT  ASi/O 
ROWER 

/3, 6a  % 


a/2%J!eL/9\ 


SLECT/7/C 


OAS 


0./2% 


(Beferance  Notes  for  Table  No.  19.) 

NOTB— Index  for  "Cost  of  Service  Paid  by":  1-  Tax  Levy;  2-  licenMs; 
8-  Pees;  4-  Rates;  5-  Rentals;  6-  Fares;  7-  Duties;  8-  Internal  Revenue. 

REMARKS—*,  t,  t,  are  group  total  per  cents.  §  This  added  to  aoMNint  for 
water  in  Table  12  gives  total  a  litUe  less  than  in  the  original  report 


TABLE  NO.  20 

ANNUAL  COST  OF  DIFFERENT  KINDS  OF  PUBLIC  SERVICE,  AND  THE  PER 
CENTS  OF  EACH  WHICH  THE  PROBABLE  SAVING  FROM  "FAIR 
RETURN"  RATE  ON  PROPERTY,  AND  A  REDUCTION  OF 
OVERHEAD  EXPENSE,  DUPLICATION  OF  SERVICE, 
ETC.,  WOULD  PROBABLY  AMOUNT  TO 

Annual  Ssfing  and  Their  Per 
Cents  of  Service  Costa,  Etc. 
"Fair  Return"  "Service"  Total 

 ^Per  Capita  

--Cost  of  Service-.      |17.21       18.82  $26.03 

Ownership,  Kind  of  Service,  Per   Total  

or  Revenue  Origin—         Total.        Ci^^ita.  |«,605,000  $4,410,932  $13,015,932 

Per  Cent.  Per  Cent.  Per  Cent 

Total  Public  Service  $75,732,449  $151.46  11.36  5.82  17.18 

Publicly  Owned  Service....  31,623,127  63.24  27.21  13.95  41.16 

Privately  Owned  Service...  44,109,322  88.22  19.61  10.00  29.51 
Non-Revenue  Producing 

Service                             25,742,266  51.48  33.43  17.13  60.56 

Revenue  Producing  Service  49,989,983  99.97  17.21  8.82  26.03 

Tax  Levy,  Total,  Direct....  11,163,715  22.33  77.08  39.51  116.59 

Tax  Levy,  City,  Direct            6,753,715  13.51  127.41  65.30  191.71 

Tax  Levy,  County,  Direct*..   4,410,000  8.82  195.12  100.02  296^4 

*City's  portion  of  County  Direct  Levy.  The  cost  of  the  non-revenue  producing 
service  paid  out  of;  direct  tax  levy;  fees;  licenses;  internal  revenue;  duties;  etc 


A  reference  to  Table  No.  20  shows  the  potential  saving  betweail|||p|P  Ul  vST 
and  "City  Bond  Interest"  on.  the  investment  per  capita,  of  the  privately  owned 
public  service  utility  concerns,!  is  almost  twenty  (19.51)  per  cent  of  the  annual 
cost  of  the  service  rendered  by  these  agencies.  It  is  of  particular  significance 
that  this  saving  is  over  three-quarters  (77.08%)  the  amount  of  the  total  direct  tax 
levy.  It  is  over  one  and  one-quarter  times  (127.41%)  the  total  city  tax  levy  and 
almost  twice  (195.12%)  the  amount  of  the  cit^r  share  of  the  oounty  direct  tax  levar. 

Compare  these  items  of  service  costs  with  the  direct  tax  levy  per  capita,  in 
per  cents  of  $22.33: 

$35.00  for  interstate  railway  service  is  156.74  per  cent  of  $22JIS 

$16.20  for  local  street  railway  service  is  72.55  per  cent  of  $22.88 

$13.04  for  local  telephone  service                            .Is  58.39  per  cent  of  $22.33 

$12.52  for  electric  service  Is  56.07  per  cent  of  $22J8 

$  9.65  for  education  is  43.22  per  cent  of  $28.88 

$  8.21  for  gas  service  is  36.77  per  cent  of  $22.38 

The  objection  may  be  raised  that  the  suggested  annual  saving  of  over  eight 
million  and  a  half  dollars  is  based  on  interstate  service  cost  as  well  as  local;  and 
that  the  taking  over  of  the  railways  by  the  general  government  is  too  remote  to 
consider  as  a  practical  move  at  this  time.  To  such  an  objection  It  may  be  an- 
swered that  if  the  efforts  toward  government  ownership  were  confined  to  local 
service  utilities,  now  in  private  hands,  the  following  showing  should  be  made. 
Tables  Nos.  8  and  9  show  that  the  value  of  property  devoted  to  local  utility  service 
is  $140,427,000  or  $280.85  per  capita.  This  amounts  to  57.11  per  cent  of  the  CMty's 
total  share  of  u^ty  service  property,  privately  owned.  It  will  thus  be  seen  that 
considerably  more  than  half  tho  amounts  previously  given  would  apply  If  tlie 

[33] 


local  utilities  alone  were  considered.  To  be  specific,  three  and  one-half  per  cent 
of  $280.S5  amounts  to  $9.82,  aa  the  annual  saying  per  capita.  This  total  for  the 
eUr  (14,910,000)  added  to  tea  per  cent  of  local  utility  seryice  cost  ($26,078,782  z 
W%)  12.507.878,  gives  a  total  saving  of  $7,422,878.  This  amounts  to  more  than 
iMlf  the  iwt1meti!ii  poesible  annual  saTlng;  before  mentioned,  of  $13.016,932. 


What  the  Potential  Saving  Would  Buy 

•The  matter  may  very  be  put  in  another  way.  If  the  people  of  Los  Angeles 
were  able  to  save  this  larger  amount  ($13,016,932)  every  year,  some  of  the  follow- 
ing results  might  be  accomplished: 

One  year's  eaving  ($13,015,932)  would  nearly  pay  for  the  estimated  value  of 
the  Los  Angeles  Gas  and  Electric  Corporation  property  (Table  No.  5,  $14,000,000). 
Hie  same  estimate  also  applies  to  the  two  telephone  companies.  It  would  more 
tian  two-thirds  pay  the  estimated  value  of  the  anUre  property  of  the  Southern 
Califomla  ESdiami  Oompaay,  $19,000,000. 

Two  ysara'  saving  ($26,031,864)  would  more  than  cover  the  estimated  value  or 
honded  debt  ($23,500,000)  of  the  Los  Angeles  Railway  Corporation.  It  falls  only 
12,967,136  short  of  the  estimated  value  of  the  property  of  the  Padflc  Light  & 
Power  Ck>rporation. 

Eieven  years'  savings  ($143,175,252)  would  more  than  pay  for  the  entire  esti- 
mated value  of  all  local  utility  service  property  now  under  private  ownership 
($140,427,000)  devoted  to  the  service  of  the  people  of  Los  Angeles. 

On  the  face  of  this  showing  alone,  we  have  no  hesitancy  in  making  the  un- 
qualified assertion  that  all  utility  service  that  depends  on  franchise  grants,  or  is 
In  Its  natnre  a  menopoly,  should  be  owned  and  opeiated  as  |i  government  enter- 
prise. 

Moral  Worth  of  Qevrnmewt  Ownership 

Aa  previously  stated  we  have  not  lacked  for  sensational  exposures  of  corrup- 
tion and  gnurt  in  franchise  trading,  and  steals,  as  well  aa  in  public  works  contract 
scandals.  As  an  additional  and  attendant  evU  of  private  ownership,  stock  Jobbing 

and  gambling,  are  of  serious  importance. 

We  may  be  indifferent  toi  corruption  and  scandal,  but  if  the  oft-repeated 
complaint  about  high  taxes  is  any  criterion  of  interest,  tl^en  the  question  of  pub- 
He  GwnendilPb  as  affektaig  us  by  self-interest  In  dollars  and  cents,  should  be  of 
compelling  vital  interest  and  importance  to  any  person,  paying  utility  service  rates, 
either  directly  or  indirectly,  if  the  flgnrea  above  presented  are  worthy  of  confi- 
dence, which  we  believe  they  are. 

Where  we  have  established  a  community  interest  in  service,  such  as  schools, 
postal  service,  conservation  of  health,  fire  protection,  policing,  water  service,  etc., 
tliOTe  la  never  a  question  raised  as  to  the  propriety  or  desirability  of  their  conduct 
as  public  enterprises.  The  question  therefore  naturally  arrives  as  to  why  we  should 
hesitate  or  be  timid  about  the  complete  extension  of  government  ownership  to 
cover  all  public  utility  service? 

There  Is  perhaps  nothing  that  wfll  ecmdnce  to  the  upbuilding,  well-being  and 
advancement  of  a  community  so  much  as  the  widespread  and  unselfish  interest  of 
all  of  the  citizens,  in  the  things  essential  or  desirable  for  the  good  of  all.  Any 
conditions  or  agencies  that  stand  in  the  way  of  this  attainment  should  be  removed. 

Corrupting  Influence  of  "Private  Interest" 

The  "Invisible  Government"  or  "System"  is  not  a  myth,  belonging  only  to 
other  times  and  places.  Do  not  forget  for  a  moment  that  this  influence  is  always 
present  and  potently  active.  No  better  evidence  of  this  need  be  shown  than  Is 
given  in  the  words  of  Franklin  mehbom  In  "^e  System,"  whiek  we  tidte  the 
Uherty  of  copying. 

'The  great  San  Francisco  fire  was  brought  under  control  Friday,  April  20,  1906. 
The  Sunday  following,  the  first  step  was  taken  toward  getting  the  scattered  Board 
irf  Supervisors  together.  .  .  The  ashes  of  the  burned  city  were  still  hot;  the 
average  citisen  was  thinking  only  of  the  next  meal  and  shelter  for  the  night  for 
htanseif  and  dependents.  But  the  public-service  corporations  were  even  then  active 
in  furthertag  flaaa  whldh  had  heeii  teipflrarily  dropped  while  San  Francisco  was 
boniins. 

[34] 


Ttenlajr.  Ansoit  $,  191& 


«^  TALENT.  »  m  FOLPIT 

There  is  an  idea  abroad  in  the 
dutrch  Uiat,  for  pjirposes  of  religious 
ffOafts,  hiMk  instnincatatlt  vt  at  ef> 
(IcieAt  as  more  puissant  -ones — fully  as 
efficient;  that  while  in  other  matters 
there  is  a  direct  ratio  between  human 
.abtfity  and  accruing  affects,  in  the 
range  of  Christian  effort  the  ratio  be- 
twe<iii  the  two  ia  an  inverse  one.  and 
tiw  HMwe  hopfess  the  instrument 
God  uses  for  thVpromotion  of  Chris- 
4iaa  iatcfcst  the  more  God  thinks  of 
.k,  aad  tfie  more  abundanUy  he  will 
Mni  k.  In  olden  times  certainly  there^ 
fras  no  divine  prefferencc  for  human 
dbiltty  when  is   was   a   matter  of 
■riaiiteriiif  at  ttc  attar,  and  it  is  aot 
'de^r  that  -God>  choice  distinct  Lev- 
itical  requirement  that  no  man  with 
'»  blemish  should  come  nigh  th«  altar 
WoCer  the  offerii«  of  tfie  Lord.  That 
evinces  God's  purpose  that  no  man 
should  have  charge  of  sanctuary  ser- 
vice wIm  was  physictlly  dcficicBt;  aflid 
the  infei'enc^  is  easy  not  to  say  neces- 
sary, that  he  woUld  regard  with  reluc- 
tance the  intrusion  into  sanctuary  of- 
fim-(rfa  mn  othcnrisc  dcidoit 
"tji^l  the  notion  has  !5mehow  become 
ttCnsed  that  pretty  much  anything 
win  answ^  wkcK  it  is  a  question  of 
Jlipaking  a  miaister.  Not  long  ago  I 
^  '  .as  called  upon  by  a  lady  of  consid- 
erable Christian  eminence  who,  in  the 
covrac  of  conversation  rcttfrdiiig  her 
'■houiekold,  told  me   that   she  had 
«hf9«  sons— John  James  and  William. 
Sikfcgu«'t6  Jdw  she  fail  Itet  she 
liad  devoted  hiia  to  Uit.  Jame«,  she 
said,  early  developed  grcfi- talents  of 
a  moneury  kind— shrewdness,  clever- 
meai  aad  tke  lOifrMMid  she  put  him  to 
Business.  The  third  son.  William,  she 
remarked,  in  ad  apologetic  kind  pf 
way.  she  had  consecrated  id  the  Lofd, 
intending  ne  to  understand  that  he 
had  been  set  apart  for  th  Christian 
ministry.  A  little  later  in  the  course  of 
eejiversation,  aflcr  her  characterisa- 
tion of  her  three  sons  hs)d  passed  out 
her  mind,  she  remarked,  casually, 


ncss  for  a  bank  presiddnpy.  The  great-  force  automobilistt 
est  man  that  ever  lived  was  minister. '  tcrmediate  gear. 
The  pulpit  win  rea^  in  hs  effects  |  Lane,  wh»  was  one  of  tfie  bnOdcn 
just  according  lo  the  power— conse- '  of  the  Los  Angeles  aqueduct,  and 
crated  power,  of  course— of  the  man  who  has  just  completed  lor  the  City 
that  occupies  the  pulpit.  God  uses  his '  of  Los  Angdes .  the  presenutioa  ot 
men  for  all  they  are  worth;  He  can-'  j  At  asost  impdritant.  rim  caM  over 
not  use  them  for  any  more;  He  will  j  heard  before  the  Railroad  Commis- 
not  use  them  for  any  less.  The  onIy|Sion,  said- in  his  letter  of  instructions 
profession  or  pursuit  <tf  which  It  can  1  to  the  Board  of  Public  llVbrfcs»  "The 
be' said  that  its  field  it  die  iMWld  is  the  {Pacific  Electric  has  four  t^cks 
Christian  ministry.  {Crossing  Mission, Roard  at  Rose  Hil) 

—Dr.  Charles  H.  PiiddfnrtI     at  an  oblique  angle.  Many-  ob^^c- 

tionB  to  a  dear  wfw  of  dw  fia  sirs 
have  been  feinoved.  Warning  bells 
and  wig-wags  have  been  iastallcd. 
StiU  this  lenans  a 


D.  M.  Reynolds. 
SpL  Agt.  President 

Pacific  Electric. 
PSOTXCTION  FOR  QSaDB 

CROSSINGS 
"Thank-you-mami's"  to  protect  fail- 
way  grade  crossnigs  m  now  aredity, 
for  Fulton  Lane,  President  of  the  Los- 

Angeles  Boaid  of  Public  Utilities,  and, ^fJIJJf^^^fJ^J^*; 
the  man  whose  appoiatmeat  to  fill 
the  next  vacancy  on  the  State  Biail 


aWft 

She  tally's  in 
Aad  jumps 

—  -   .-  ,   ,   Aad  aiaita  \ 

crMsing,  wmd  a  menace  to  Klc  hardly  1  Sse  daacea  wl 


Our  Susie  keeps  « 
Just  like  a  regul 

Slw  waves  it  wh^ 
Airfaasisil-p 

She  nmadkca  fee 
gaase, 
Ste  urenliu  ? 

And  cheers  the  r 

>  With 


equalled '  in  the  City,  on  account  of 
the  sharp  angle  and  the  careless  dis- 
regard of  of  anlooBohae  drivcts  to 
the  warning  signals. 
"The  more  accustomed  aulooiobile 

croiiiafc  the 
more  cardess  tfiey  are  to  its  tram- 
ing  signals,  and  the  more  chances 


ijbad  Commission  is  being  urged  in\^'y  t^^e  in  attempting  to  beat  the 
Southern  California,  is  now  leading 
the  ginda  ciossiag  protection  ■>«•«- 


trains  to  and  across  this  svdo 


Stop  spccdtes,  and  only  recently  thb 


effort  to  cut  down  the 
deaths-  reported    each  year  to 
Interstate  Commerce  Commiss\bn. 

In  ain.  effort  to  co-operate  with  the 
Sute  R|(ilroad  Comniission  in  the  pro- 
lection  of  dangerous  crosdngs.  Lane 
4ias  instructed  the  Board  of  Public 
\Vorks  of  Los  Angdes  to  place  a 


^1  stop  spccdtes,  and  only  re< 

County  issued  a  permit  to  an  indi- 
vidud  ow^er  tf>  put  such  check  in 
front  of  hii  property.on  one  of  the 
County  boulevards. 

This  method  seen^  to  havi  proved 
a  successful  mc^oA  of  fMting  a 


"thank  ytu  mann-  at  the  ctosdnt  ;  «fc««k  »P««<«^  V****'*** 
of  the  Pacific  Electric  fdtar  track  line 


and  Mission  Road   on   the  busiest 


make  for  greater^fcty  at  rdlroad 
crossings.   Checks  ion  Mission  Road 


And  tremblet 
And  often  shari 
YoriVhMTf 


She  writes  golt 
And  dapa  the 
She  hiaaca  at'Ai 

\^7>en  he  coun 
She 
hnt 

In  ciphers  tha| 


Oh.  show  nw 

Upon  the  p| 
Or  ancidit  tiM 


Tell  me  iMt  of 
Or  mystic-C 
They're  easy 


Pasadena. 

A  bump  wilt  be 


!feet  from  the  railroad  right-of-way. 
constroced    fifty '  and  in  the  stree   tover  which  your 


feet-on  each  side  of  the  railway 
tracks  to  force  Inttomohiles  to  alow 
down  to  8  miles  an  hour  in  running 
over  this  dange«bos  crosdng. 

The  construction  of  a  series  of 
checks  on  each  side  of  railway  ccosa- 
ings  to  protect  speeders  i^ainst 
themsdves,  has  been  advocated  hoA 
by  members  and  engineers  of  the 
State  Railroad  Commission  and  of- 
ficials of  the  Automobile  Club  of 
Southern  Cdifornia.  UntU  this  time,] 


Board  has  jurdiction.  Snch  chedcs. 
on  both  sides  .of  this  crossing,  wodd 
be  a  cbmparatively  Inexpensive  ex- 
periment, and  one  that  merits  a  fair 
tfiaL* 


BSBVrriBB. 


SUhat  Waiiaai  had  dways  beca  a  pip- 
l^iag  sort  of  child,  aad  she  never  had 
much  expectation  of  beinf  d»lc  to 
raise  him. 

•Wholeness  is  nC  sense  holiness. 
Completeness  is  first  cousin  to  conse- 
cration; and  whn  it  is  a  matter  of 
choosing  men  to  be  ninisters,  God's 

^pped  is.  first  of  all,  to  them  that  .are         daim  agent  of  the  Pacific  Elec- 
pwe  in  heart  not  only,  biit  to  them 
^t  are  sUnch  in  body  and  gifted  in 
mind;    in    other    words,  human 
thoroughbreds. 

There  is  no  ministerial  arr.ogance  in 
this. 'It  is  a  frank  statement  of  fact, 
and  fact,  too,  in  the  light  of  which 
we  need  to. think  and  act  in  all  matters 
relative  to  th  enriching  and  strength- 
ening of  the  Christian  ministry.  If 
you  want  to  make,  a  man  president  of  ^  

a  bnk,  you  will  insist  that  he  be  hon-  additional  investigating  willi  be  made 
»«;  hat  «iat  wiB  go  very  little  way  in  aft«r  the  work  is  done,  in  i>rder  to  de- 
fjLar  esteeem  toward  making  out  his  termine  the  value  of  the  innovation, 
^mpetency  for  th  position.  Goodness     Several  construction  methods^  are 

way  toward  suggested,  dther  the  construction  of 


Many  a  man  who  tfMta  hinudf  a 
modem  bif^  gaa  is  oi^  an  oM  aoMoth 
bore. 

*  •  • 

definite  action  lo  try  out  this  asetbod 
of  crossing  protection. 
Some  dajrs  ago  S.  A.  Bishop,  gen- 


trie  addressed  a  letter  to  the  SUte 
Railroad  Commission  and  to  the 
Board  of  Public  Utilities,  suggesting 
that  an  experiment  along  this  Hue 
be  tried,  and  Lane,  in  order  to  try  out 
the  proposed  plan  at  once,  decided  on 
the  most  dangerous  crossing  in  the 
City  of  Los  Angeles  tor  the  teat. 

According  to  the  pfain  outiined. 
ipeed  data  wiB  be  taken  at  this  cross- 
ing before  the  bump  is  instdled,  and 


driving  so  ^any  people  into  clubs  and 
hotels? 

•  •  • 

Where  a  busy  man  is  tempted  by 
one  devil  the  loafer  is  tempted  by  a 
d<»en.*Get  bnsy* 

•  •  • 

It  is  getting  harder  every  day  for  a 
man  to  succeed  in  any  calKng  and' yet 
be  a  drinker. 

•  ♦  • 

IjCtter-writing  preachers  are  seldom 
promoted,  and^yet  they 
the  reason  why. 


Atiht  ««•> 
that  their 

Gov.  Han> 
Metodkt  Epi* 
ger  merdy  nt 


When  a  man 

gion  which  mak^ 
body  else  is  bad 
ter  ask  hlassclf : 
dridn. 

Now  that  in. 
ebb.  Americanta 
tide.   Let  us  h; 
spirit  of  '76.  / 
an  the  tec; 

Yoo  thiak  • 
would  do  so 
are  that  yon* 
you  can  with 
ably  accomp: 


[Preachers  mi 
in  the  right  sen 
should,  not  be 


nervous  people  by  |ttst  lettinf  tfM« 

pleasantly  alone.. 

•  ♦  « 

FdthfttI  are  the  woonda  of  a  friend. 


I  the  limited  ex 
dently  partis; 
party  wrongs 


goes  aboot  as  short    ^ 

composing  fitnest  for  tl\e  nrinistry  as  a  bHimp  or  a  dip  in  the  road  or  the ,  but  don't  sharpen  your  tonpic  fast  to, 
hfliwitj-  does*  toward  composing  fit-^  building^  of  a  sand  pit  which  would  give  point  to  an  adage 


The  only  gei 
ccsduUy  count 


Fig.  2 


.  .  Hie  people  fmsol  for  the  time  tlie  UNnies  wMdi  liad  before  tie  die- 
atter  divided  the  €ftjr.  But  th^  agents  for  the  puhlic-senrice  corporations  did  not 
forget.  We  find  a  representative  of  the  Home  Telephone  Company  picking  his 
way  over  the  hot  ashes  of  the  burned  city  to  (Supervisor)  McGushin's  saloon  to 
meet  the  Supervisors  that  the  interests  of  his  company  might  be  preserved.  .  .  . 
Bfea  as  the  Home  Company  was  ee^klng  out  the  SupervisorSt  the  United  Railroads 
was  getting  in  touch  with  Rnel" 

While  the  incompetency,  corruption  and  graft  in  San  Francisco  was  no  worse 
than  has  been  and  is  experienced  by  other  cities,  the  "exposures"  have  been  more 
■CHaattonal  and  complete;  and  more  court  convictions  secured  than  in  any  others 
undertaken  in  the  eoontiy.  Inehided  in  the  miTicticmB  were  iMj  officials,  bribe 
takers  and  bribe  givers.  Even  so,  the  convictions  fell  short  of  the  full  measure 
of  Justice,  which,  howerer*  was  through  no  fault  of  those  who  conducted  the  orig- 
inal prosecution. 

Does  anyone  for  a  moment  imagine  that  these  same  corrupting  influences  are 
mil  at  woik  in  the  city  of  Los  Angeles? 

Publicity  and  tlie  Prostitution  of  the  Press 

The  greatest  weapon  against  this  selfish  influence  is  full  and  truthful  pub- 
licity. On  the  other  hand  the  most  insidious  and  ingratiating  influence  of  the 
"System"  is  accomplished  through  "controlled"  publicity.  Consequently  the  "Sys- 
tem" is  "in"  the  publishing  business  and  has  established,  and  maintains  all  but 
complete  control  over  newspaper  publicity.  As  a  fair  example  of  publicity  appar- 
ently backed  by  "Inspiration,"  note  Fig.  2,  which  is  a  photograph  of  an  article  ap- 
pearing in  the  California  Independent  of  August  3,  1916.  It  is  a  fair  presumption 
that  it  was  not  the  intention  to  have  the  "letter  head"  appear  as  copy,  as  we  are 
reliably  informed  that  after  the  discovery  was  made  that  a  "slip"  had  occurred,  the 
issne  was  suppressed.  As  to  what  degree  of  friendliness  is  entertafaied  by  the 
'•Special  Agent  of  the  President  of  the  Pacific  Electric"  and  other  corporation 
friends  toward  the  other  members  of  the  Board,  of  which  the  gentleman  referred 
to  in  the  article  is  a  member,  we  are  not  in  possessiont  of  "published  information" 
In  state.  Mote  Hues  3  to  8  iwdusiTe  under  "Protection  for  Grade  Crossings,"  Fig.  2. 

Our  "Frlendi"  the  Special  Agents  and  Their  "Friendships 

We  need  not  flatter  ourselves  with  the  assertion  or  belief  that  there  are  not 
other  officials,  both  electiTe  and  apptrfntive,  that  are  well  liked,  by  the  "Special 
Agents"  of  the  utility  interests. 

Mr.  Abraham  Ruef  was  paid  for  his  "services"  as  an  "attorney."  "There  are 
other  ways  of  killing  a  dog  than  choking  him  to  death  with  butter."  Sometimes 
officials  are  given  a  "friendly  tip"  on  how  to  invest  profitably  in  stocks.  Some- 
times i^fidals  are  entrusted  with  the  right  to  secure  "options**  oh  property  desired 
by  and  useful  to  public  service  corporations  or  their  friends.  Sometimes  public 
officials  are  given  an  opportunity  to  "earn"  commissions  on  services  rendered. 
There  are  many  ways  in  which  "Special  Agents"  can  render  themselves  agreeable 
and  prove  their  qualifications  as  "good  fellows." 

BvideBea  is  not  lacking  to  show  that  the  puhlie  works  contractors  Insist  on 
showing  th^  "friendship"  to  public  officials  and  employes  in  many  different  ways. 

On  the  other  hand  when  public  officials  or  employes  are  not  responsive  to  the 
"friendship"  of  the  invisible  government  or  system,  they  are  generally  given 
to  understand  and  feel  that  they  "do  not  belong." 


CM] 


CONCLUSION 


Distinct  Gains  from  Government  Ownership 

We  are  definitely  of  the  opinion  that  the  complete  ownership  and  operation 
of  all  public  utility  service  undertakings  by  the  government  should  result  in  the 
following: 

1st.  Lowering  the  cost  of  service,  equivalent  to  over  seventeen  per  cent  of 
the  entire  public  service  cost,  or  to  nearly  thirty  per  cent  of  the  cost  of  service 
rendered  under  present  private  ownership.  Again  this  saving  should  amount  to 
more  than  the  entire  direct  tax  levy  at  the  present  time; 

2nd.  Better  service,  through  the  elimination  of  duplicated  property  and 
service. 

3rd.  The  removal  from  the  political  field,  all  of  the  activity  and  pressure  now 
exerted  through  interest  3n,  property  owned  and  service  rendered,  by  private  own- 
ership for  profit,  which  has  been  and  is  responsible  for  such  a  Imqge  part  of  the 
corruption  and  graft  in  the  conduct  of  government; 

4th.  The  united  sentiment  and  support  of  the  major  portion  of  the  citizens 
of  the  community,  in  an  insistent  demand  for  efficient  and  honest  service  by  public 
officials  and  employes,  in  the  interest  of  the  general  good,  instead  as  now  too  often 
happens,  in  the  interest  of  special  privilege. 

Sth.  The  relief  of  the  press  from  the  pressure  and  influence  now  exerted  by 
the  "System,**  in  behalf  of  public  works  contractors  and  the  public  utility  concerns. 

6th.  The  united  interest  and  loyalty  of  the  great  majority  of  the  citisens  in 
the  public  service  of  all  kinds,  rendered  for  the  benefit  of  all. 

Evil  Influences  Still  Remain 

If  all  of  the  influences  now  exerted  by  the  interests  connected  with  public 
utility  service  and  public  works  contracts,  were  removed,  there  is  still  enough 

self-interest  left  from  other  sources  to  more  or  less  effectively  stand  in  the  way 
of  the  best  and  most  efficient  government,  devoted  to  the  general  good.  There 
are  many  forms  of  petty  graft  that  still  remain  as  a  temptation  for  dishonest  and 
unscrupulous  persons  to  seek  and  obtain  office  for  narrow  self-serving  and  "profit** 

Qalns  More  Than  Worth  the  Effort  to  Secure  Government  Ownership 

From  the  fact  that  practically  all  American  cities  have  been  and  are  poorly 
governed,  an  earnest  and  determined  effort  should  be  made  to  discover  and  apply 
effective  remedies.  We  believe  from  the  facts  shown  in  this  report,  that  the  first 
step  should  be  to  establish  all  public  utility  service  and  public  works  construction 
as  government  undertakings. 

To  do  this  for  the  entire  country  will  mean  a  great  amount  of  constructive 
effort  and  a  fight  of  no  mean  proportions.  In  our  estimation  it  is  a  fight  that  will 
unquestionably  have  to  be  made  and  the  sooner  it  is  started  in  earnest  the  better. 

United  States  Government's  Ownership  of  the  Telegraph;  Other  Service 

The  United  States  Government  constructed  the  first  telegraph  line  in  1843-4, 
from  Washington  to  Baltimore,  and  sold  it  to  private  parties  in  1847.   In  1806 
Congress  passed  a  law  authorizing  the  government  to  purchase  all 
graph  lines  after  1871.  Many  of  the  Postmaster  Generals  have  since  recomp|||||^ed 
the  purchase  of  the  telegraph  by  the  government.  ^^^^ 

We  believe  the  United  States  Government  should,  with  the  least  possible 
delay,  take  over  both  the  telegraph  and  telephone  systems  of  the  country  and 
operate  them  as  a  part  of  the  postal  system.  All  of  the  business  now  carried  on 
by  the  private  express  companies  should  be  carried  on  by  the  post  office  depart- 
ment, and  the  private  concerns  prohibited  from  competition,  as  was  done  in  the 
letter-carrying  service  in  1845.  After  this  is  accomplished  the  general  government 
Should  beg^  taking  over  the  interstate  raihroadB. 

£571 


What  Los  AngstM  Should  Unckrtako 

Wm  the  City  of  Im  Ingetos  we  recommend  and  urge  that  all  loeal  utility 
■arfioe  %e  taten  over  ^  tie  €lty,  prefeimldy  la  tlie  foUowliig  order: 

lit.  The  eompletlim  of  the  ynrchaae,  a»d  the  devdopsint  of  the  required 
equ^OMiil  lor  the  entire  dtj  eleetrie  aerfice; 

2nd.  Ckumpiete  the  purchasing  of  all  of  the  remaining  water  companies; 

3rd.  Take  over,  with  the  least  possible  delay,  the  entire  eiinlpment  of  the 
Loa  An^Eeles  Gas  and  Eleetrie  Oorp<»atlon  as  well  as  all  other  gaa  supplies  In  the 
dty; 

4th.  Take  over  the  local  transportatUm  senice; 

5th.  Take  over  all  of  the  terminals  of  the  interstate  railroads  In  the  dty; 

Cth.  Extend  the  scope  of  the  municipal  markets; 

7th.  Bstahllahmnniclpal  baths; 

Sih.  BataMlBh  municipal  alani^ter  houaea. 

Any  Amoflcan  CSIty  that  first  accompllahes  an  of  these  undertaUngs  may  he 
eeuaietf  m  real,  pioneer  aa  fir  as  'thia  'Country  la  concerned. 

■etiar  Qevemmeiill  Ooverwwient  Owneraiiip  One  Step;  BeHer  Citizenship  Another 

The  full  realisation  of  goTemment  ownership  and  conduct  aU  public  serrlce 
Win  not  automatically  insure  honest  and  efficient  govemment.  As  yet  we  have  not 
trained  ourselves  to  that  high  standard  of  citizenship  that  calls  forth  the  unselfish 
interest  and  devotion  to  the  general  welfare,  that  is  essential  to  the  success  of 
■elf -government. 

We  hear  much  of  the  patriotism  of  war  at  this  time.  The  demand  and  in- 
eentire  for  the  patriotism  of  peace,  though  not  as  Intense  as  that  of  war,  is  never- 
theless ever  present  to  enlist  the  disinterested  efforts  of  all.  We  must  foster  the 
constructive  patriotism  of  peace  for  the  common  good  of  all. 

The  accomplishment  of  anything  really  worth  while  generally  costs  consider- 
ahle  eHort. 

To  redeem  our  municipal  governments  from  the  old  curse  of  inefficiency, 
graft  and  misrule  is  more  than  worth  the  effort  it  will  cost.  As  it  is  a  real  job, 
let  ua  go  to  work  with  determination  and  keep  at  it  untU  we  succeed. 

June  7tht  1917.  by  Committee  on  Municipal  Ownership. 


'(CHgned) 


MARTIN  BEKINS. 

RALPH  BENNETT. 

H.  STANLEY  BENEDICT. 

T.  B.  GIBBON. 

g.  C.  GRAHAM. 

JOHN  R.  HAYNES. 

C.  W.  KOINBR. 

RAY  E.  NIMMO. 

GHARIJQS  K.  M OHLBR* 

Oialrman. 


fl 


CMered  Printed  by  the  Oub  June  30,  1917. 

WALTBE  E.  STEVENSON, 

Secretary. 


C49 


City  oltib  of  Lom  ^eles,  Cal, 
aoaDittM  OQ  Bunioipal  ownership, 

_       Report  on  jovgipiiiA  ownership^ 


}       ^LfJWBIA  UNiyERSITY  LIBRARIES 


0044268297 


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